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Exhibit 4.1    
    

 
  AMENDED AND RESTATED STOCKHOLDERS RIGHTS AGREEMENT    
    

        AMENDED AND RESTATED STOCKHOLDERS RIGHTS AGREEMENT, dated as of April 22, 2003, (this "Agreement"), between
Pacific Capital Bancorp, a California corporation (the "Company"), and Mellon Investor Services LLC, a New Jersey limited liability company (the "Rights Agent"), as successor to Norwest Bank
Minnesota, N.A., with reference to the following facts. 

        A.    On
October 27, 1999, the Board determined it desirable and in the best interests of the Company and its stockholders for the Company to approve and adopt this
Rights Agreement and to declare the distribution referred to in the following recital clause; 

        B.    On
October 27, 1999, (the "Rights Dividend Declaration Date"), the Board authorized and declared a dividend distribution of one Right (as hereinafter defined) for
each share of Common Stock outstanding at the close of business on December 14, 1999 (the "Record Date") and has authorized the issuance of one Right (as such number may hereafter be adjusted
pursuant to the provisions of Section 11(i) or Section 11(p) hereof) for each share of Common Stock issued between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter defined), and under certain circumstances thereafter, each Right initially representing the right to purchase one
one-thousandth of a share of Series A Preferred Stock, no par value, of the Company having the rights, powers and preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth (the "Rights"); 

        NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: 

Section 1.    CERTAIN DEFINITIONS.    For purposes of this Agreement, the following terms have the meanings indicated: 

        (a)   "ACQUIRING PERSON" shall mean: 

        (i)    any
Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include: 

        (ii)   the
Company; 

        (iii)  any
Subsidiary of the Company; 

        (iv)  any
employee benefit plan of the Company, or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan; 

        (v)   any
Person who becomes the Beneficial Owner of fifteen percent (15%) or more of the shares of Common Stock then outstanding as a result of a reduction in the number of
shares of Common Stock outstanding due to the repurchase of shares of Common Stock by the Company unless and until such Person, after becoming aware that such Person has become the Beneficial Owner of
fifteen percent (15%) or more of the then outstanding shares of Common Stock, acquires beneficial ownership of additional shares of Common Stock constituting one percent (1%) or more of the shares of
Common Stock then outstanding; 

        (vi)  any
such Person who has reported or is required to report such ownership (but less than 20%) on Schedule 13G under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and in effect on the date of this Agreement (or any comparable or successor report) or on Schedule 13D under the Exchange Act (or any comparable or successor
report) which Schedule 13D does not state any intention to or reserves the right to control or influence the management or policies of the Company or engage in any of the actions specified in
Item 4 of such Schedule (other than the disposition of the Common Stock) and, within ten (10) Business Days of being requested by the Company to advise it regarding the same, certifies to the
Company that such Person acquired shares of Common Stock in excess of 14.9% inadvertently or without knowledge of the terms of the Rights and who, together with all Affiliates and Associates, 

1

 

thereafter
does not acquire additional shares of Common Stock while the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding; provided that if the Person requested to so
certify fails to do so within ten (10) Business Days, then such Person shall become an Acquiring Person immediately after such 10-Business-Day period; or 

        (vii) any
Offering Person and any Affiliate or Associate of such Offering Person, if such Offering Person or any Affiliate or Associate thereof has entered into any
agreement or arrangement providing for an Acquisition Transaction (as defined in Section 1(r) hereof). 

        (b)   "ADJUSTMENT SHARES" shall have the meaning set forth in Section 11(a)(ii) hereof. 

        (c)   "AFFECTED TRANSACTION" shall have the meaning set forth in Section 23(c)(i)(B)(2) hereof. 

        (d)   "AFFILIATE" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act. 

        (e)   "AGREEMENT" shall mean this Stockholders Rights Agreement. 

        (f)    "ARTICLES OF INCORPORATION" shall mean the Company's Articles of Incorporation, including all Certificates of
Determination of the rights, preferences and privileges of any series of capital stock, as in effect at the time in question. 

        (g)   A
Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any securities: 

        (i)    which
such Person or any of such Person's Affiliates or Associates, directly or indirectly, owns or has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Triggering Event (as hereinafter defined), or (C) securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such Person or any of such Person's Affiliates or Associates prior to the Distribution Date (as hereinafter defined) or pursuant to Section 3(a)
or Section 22 hereof (the "Original Rights") or pursuant to Section 11(i) or Section 11(p) hereof in connection with an adjustment made with respect to any Original Rights; 

        (ii)   which
such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in
writing; provided that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any security under this subparagraph (ii) as a result of an agreement, arrangement or
understanding (whether or not in writing) to vote such security if such agreement, arrangement or understanding: (A) arises solely from a revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or 

        (iii)  which
are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph (d)) or disposing of any voting securities of the Company; provided that nothing in this paragraph (d) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner" of, or to "beneficially own," any securities acquired or which such Person has the right to acquire through such
Person's participation in good 

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faith
in a firm commitment underwriting until the expiration of forty days after the date of such acquisition. 

        (h)   "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the State of
California or the State of New Jersey are authorized or obligated by law or executive order to close. 

        (i)    "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., New York, New York, time, on such date; provided that
if such date is not a Business Day, it shall mean 5:00 P.M., New York, New York, time, on the next succeeding Business Day. 

        (j)    "COMMON STOCK" shall mean the common stock, no par value per share, of the Company, except that "Common Stock" when used
with reference to any Person other than the Company shall mean the capital stock of such Person with the greatest voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person. 

        (k)   "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in Section 11(a)(iii) hereof. 

        (l)    "COMPANY" shall mean Pacific Capital Bancorp, a California corporation. 

        (m)  "CONTINUING DIRECTOR" shall mean (i) any member of the Board, while such Person is a member of the Board, who is
not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, and who was a member of the Board prior
to the date of this Agreement, or (ii) any Person who subsequently becomes a member of the Board, while such Person is a member of the Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, if such Person's nomination for election or election to the Board is recommended or
approved by a vote of a majority of the Continuing Directors. 

        (n)   "CURRENT MARKET PRICE" shall have the meaning set forth in Section 11(c)(i) hereof. 

        (o)   "CURRENT VALUE" shall have the meaning set forth in Section 11(a)(iii) hereof. 

        (p)   "DISTRIBUTION DATE" shall have the meaning set forth in Section 3(a) hereof. 

        (q)   "EQUIVALENT PREFERRED STOCK" shall have the meaning set forth in Section 11(b) hereof. 

        (r)   "EXCHANGE ACT" shall have the meaning set forth in Section 1(a) hereof. 

        (s)   "EXCHANGE RATIO" shall have the meaning set forth in Section 24 hereof. 

        (t)    "EXPIRATION DATE" shall have the meaning set forth in Section 7(a) hereof. 

        (u)   "FINAL EXPIRATION DATE" shall have the meaning set forth in Section 7(a) hereof. 

        (v)   "INTEREST" shall have the meaning set forth in Section 23(c)(i)(B)(2) hereof. 

        (w)  "OFFERING PERSON" shall mean any Person (other than the Company or any of its Subsidiaries or any employee benefit plan
of the Company or of any Subsidiary of the Company or any Person appointed as trustee by the Company or such Subsidiary pursuant to the terms of any such plan in such Person's capacity as trustee)
who, at the time of the first occurrence of either of the circumstances described in clauses (i) and (ii) of Section 23(c) hereof: 

        (i)    has
commenced, or has publicly announced its intent to commence, a tender or exchange offer if upon consummation thereof such Person, together with all Affiliates and
Associates of such Person, would be the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding, 

        (ii)   has
made by public announcement or by written communication that is or becomes the subject of a public announcement, or has publicly announced its intent to make, a
proposal to the Company or its stockholders for (x) a merger, consolidation or similar transaction involving the Company or any of its Subsidiaries, (y) a purchase or other acquisition
of all or a substantial portion of the assets or deposits of the Company and its Subsidiaries, or (z) a purchase or other acquisition of securities representing 15% or more of the shares of
Common Stock then 

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outstanding
(any transaction of the type described in clauses (x), (y) or (z) of this paragraph (ii), an "Acquisition Transaction"), or 

        (iii)  has
filed an application or notice with the Board of Governors of the Federal Reserve System, or any other federal or state banking regulatory authority, which
application or notice seeks approval to engage in any transaction constituting an Acquisition Transaction. 

        (x)   "PERSON" shall mean any individual, firm, corporation, partnership, limited liability company, limited liability
partnership, trust, syndicate or other entity and includes, without limitation, an unincorporated group of persons who, by formal or informal agreement or arrangement (whether or not in writing), have
embarked on a common purpose or act. 

        (y)   "PREFERRED STOCK" shall mean shares of Series A Preferred Stock, no par value, of the Company, and, to the extent
that there is not a sufficient number of shares of Series A Preferred Stock authorized to permit the full exercise of the Rights, any other series of preferred stock of the Company designated
for such purpose containing terms substantially similar to the terms of the Series A Preferred Stock. 

        (z)   "PRINCIPAL PARTY" shall have the meaning set forth in Section 13(b) hereof. 

        (aa)    "PURCHASE PRICE" shall have the meaning set forth in Section 4(a) hereof. 

        (bb)    "QUALIFYING OFFER" shall have the meaning set forth in Section 11(a)(ii) hereof. 

        (cc)    "RECORD DATE" shall mean December 14, 1999. 

        (dd)    "REDEMPTION PRICE" shall have the meaning set forth in Section 23(a) hereof. 

        (ee)    "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning at the beginning of this Agreement. 

        (ff)    "RIGHTS" shall have the meaning set forth in Recital B at the beginning of this Agreement. 

        (gg)    "RIGHTS AGENT" shall have the meaning set forth in the parties clause at the beginning of this Agreement. 

        (hh)    "RIGHTS CERTIFICATE" shall have the meaning set forth in Section 3(a) hereof. 

        (ii)    "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning set forth in Recital B at the beginning of this Agreement. 

        (jj)    "SECTION 11(A)(II) EVENT" shall mean any event described in Section 11(a)(ii) hereof. 

        (kk)    "SECTION 11(A)(II) TRIGGER DATE" shall have the meaning set forth in
Section 11(a)(ii) hereof. 

        (ll)    "SECTION 13 EVENT" shall mean any event described in clauses (x), (y) or (z) of
Section 13(a) hereof. 

        (mm)    "SECURITIES ACT" means the Securities Act of 1933, as amended. 

        (nn)    "SPECIAL PERIOD" shall have the meaning set forth in Section 23(c) hereof. 

        (oo)    "SPREAD" shall have the meaning set forth in Section 11(a)(iii) hereof. 

        (pp)    "STOCK ACQUISITION DATE" shall mean the earlier of: 

        (i)    the
first date of public announcement by the Company that any Person has become an Acquiring Person pursuant to clause (x) of the definition of Acquiring Person,
and 

        (ii)   the
date on which an Offering Person and/or any Affiliate or Associate thereof has entered into an agreement or arrangement with the Company or any Subsidiary of the
Company providing for an Acquisition Transaction. 

        (qq)    "SUBSIDIARY" shall mean, with reference to any Person, any corporation or other entity of which an amount of voting
securities (or other ownership interests having ordinary voting power) sufficient to elect at least a majority of the directors (or other persons performing similar functions) of 

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such
corporation or other entity is directly or indirectly beneficially owned or otherwise controlled by such Person. 

        (rr)    "SUBSTITUTION PERIOD" shall have the meaning set forth in Section 11(a)(iii) hereof. 

        (ss)    "TRADING DAY" shall have the meaning set forth in Section 11(d)(i) hereof. 

        (tt)    "TRANSACTION" shall have the meaning set forth in Section 23(c)(i)(B)(2) hereof. 

        (uu)    "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or any Section 13 Event. 

        (vv)    "VALUE ENHANCEMENT PROCEDURES" shall have the meaning set forth in Section 23(d) hereof. 

Section 2.    APPOINTMENT OF RIGHTS AGENT.    The Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-rights agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any co-rights agent. 

Section 3.    ISSUANCE OF RIGHTS CERTIFICATES.

        (a)    DISTRIBUTION DATE.    Until the earlier of: 

        (i)    Stock
Acquisition Date—the close of business on the twentieth (20th) business day after the Stock Acquisition Date (or, if the twentieth (20th) business day
after the Stock Acquisition Date occurs before the Record Date, the close of business on the Record Date); or 

        (ii)   Commencement
of a Tender Offer—the close of business on the twentieth (20th) business day after the date that a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding, in either instance other than pursuant to a Qualifying Offer (the earlier of (i) and (ii) being herein referred to as the "Distribution Date"), 

        (A)  the
Rights will be evidenced (subject to the provisions of paragraphs (b) and (c)of this Section 3) by the certificates for the Common Stock registered in
the names of the holders thereof (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates, and 

        (B)  the
Rights will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a transfer to the Company). 

Notwithstanding
the foregoing, the Board may determine, at any time and from time to time prior to the Distribution Date, such specified later date for the Distribution Date following the occurrence
of either of the foregoing events, provided that if any deferral of a Distribution Date by the Board pursuant to this sentence is authorized at any time on or after the earliest of (1) the time
that any Person becomes an Acquiring Person or (2) the first occurrence of either of the circumstances described in clauses (i) and (ii) of Section 23(c) hereof, such
authorization shall be effective only if there is at least one Continuing Director then in office and only if a majority of Continuing Directors then in office concurs with such authorization. As soon
as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will if so
requested by written notice and provided with a shareholder list and all other relevant information which the Rights Agent may request, send) by first-class, insured, postage-prepaid mail, to each
record holder of the Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more right certificates, substantially
in the form of Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 11(i) or Section 11(p) hereof, at the time of distribution of the Rights 

5

 

Certificates,
the Company shall not be required to issue Rights Certificates evidencing fractional rights, but may, in lieu thereof, make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights Certificates. The Company shall promptly notify the Rights Agent in writing upon the occurrence of the Distribution Date.
Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution Date has not occurred. 

        (b)    PRIOR TO DISTRIBUTION DATE.    The Company shall deliver a copy of a Summary of Rights, substantially in the
form attached as Exhibit C hereto (the "Summary of Rights"), by first-class, postage-prepaid mail, to each record holder of Common Stock as of the Record Date. Until the earlier of the
Distribution Date or the Expiration Date, the Rights will be evidenced by certificates for the Common Stock and the registered holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights have been issued shall also constitute the transfer of the Rights associated with such shares of Common Stock. 

        (c)    LEGEND.    Rights shall be issued in respect of all shares of Common Stock which are issued (whether originally
issued or from the Company's treasury) after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date, and to the extent provided in Section 22 hereof, in
respect of shares of Common Stock issued after the Distribution Date and prior to the Expiration Date. Certificates representing such shares of Common Stock shall also be deemed to be certificates for
Rights, and shall, as promptly as practicable following the Record Date, bear substantially the following legend: 

This
certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Amended and Restated Stockholders Rights Agreement between Pacific Capital Bancorp (the "Company")
and the Rights Agent thereunder, dated as of April    , 2003, as the same may be amended, restated, renewed or extended from time to time (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge, promptly after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to, or beneficially owned by, any Person
who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void. 

        With
respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with
the Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. 

Section 4.    FORM OF RIGHTS CERTIFICATES.  

        (a)    GENERAL.    The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially in the form attached hereto as Exhibit B and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate (but which do not affect the rights, duties or obligations of the Rights Agent as set forth in this Agreement) and as are
not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face shall entitle the holders thereof to purchase such number of one one-thousandths of a share of Preferred Stock
as shall be set forth therein at the price 

6

 

set
forth therein (such exercise price per one one-thousandth of a share, as adjusted from time to time hereunder, the "Purchase Price"), but the amount and type of securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein. 

        (b)    ACQUIRING PERSON LEGEND.    Any Rights Certificate issued: 

        (i)    pursuant
to Section 3(a), Section 11(i) or Section 22 hereof that represents Rights beneficially owned by: 

        (A)  an
Acquiring Person or any Associate or Affiliate of an Acquiring Person; 

        (B)  a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such; or 

        (C)  a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with
whom such Acquiring Person has any continuing agreement, arrangement or understanding (whether or not in writing) regarding the transferred Rights or (B) a transfer which the Board, in its sole
discretion, has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of the provisions of Section 7(e) hereof; or 

        (ii)   pursuant
to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent the Rights Agent has written notice thereof and to the extent feasible) the following legend: 

The
Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of the
Rights Agreement. 

Section 5.    COUNTERSIGNATURE AND REGISTRATION.  

        (a)    COUNTERSIGNATURE.    The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Rights Certificates shall be countersigned by an authorized signatory of the Rights
Agent, either manually or by facsimile signature, and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before countersignature by an authorized signatory of the Rights Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by an authorized signatory of the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Agreement any such person was not such an officer. 

        (b)    REGISTRATION.    Following the Distribution Date, and receipt by the Rights Agent of (i) written notice
of the Distribution Date, and (ii) a shareholder list and all necessary information requested by the Rights Agent, pursuant to Section 3(a) hereof, the Rights Agent will keep, or cause
to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates. 

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Section 6.    TRANSFER OF RIGHTS CERTIFICATES; DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.

        (a)    TRANSFER AND EXCHANGE.    Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the close of business on the Expiration Date, any Rights Certificate or Certificates
(other than Rights Certificates representing Rights that may have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a share of Preferred Stock (or, following the occurrence of a Triggering
Event, Common Stock, other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged, with the forms of assignment and certificate contained therein duly and properly executed, at the office of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject
to Section 4(b), Section 7(e), Section 14 and Section 24 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment from the holder of a Rights Certificate of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights Certificates. The Rights Agent shall have no duty or obligation to take any action under any section of this Agreement which requires the
payment by a Rights holder of applicable taxes and/or governmental charges unless and until it is satisfied that all such taxes or applicable governmental charges have been paid. 

        (b)    LOST AND DESTROYED CERTIFICATES.    Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security satisfactory to them, and reimbursement
to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated. 

Section 7.    EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.  

        (a)    EXERCISE.    Except as otherwise provided in this Agreement (including, but not limited
to, the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) and subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate contained therein duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price with respect to the total number of one one-thousandths of a share of Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the earliest of (i) 5:00 P.M., Santa Barbara,
California, time, on November 30, 2009 (such date, the "Final Expiration Date"), (ii) the time at which all of the Rights are redeemed or exchanged as provided in Section 23 or
Section 24 hereof, respectively, or (iii) the time at which the Rights expire pursuant to Section 13(d) hereof (the earliest of (i), (ii) and (iii) being herein
referred to as the "Expiration Date"). 

        (b)    PURCHASE PRICE.    The Purchase Price for each one one-thousandth of a share of Preferred Stock
pursuant to the exercise of a Right shall initially be One Hundred Twenty Dollars 

8

 

($120.00),
and shall be subject to adjustment from time to time as provided in Section 11 and Section 13(a) hereof and shall be payable in accordance with paragraph (c) below. 

        (c)    PROCEDURE.    Upon receipt of a Rights Certificate representing exercisable Rights, with the form of election
to purchase and the certificate duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) per one one-thousandth of a share of Preferred Stock (or Common Stock, other securities, cash or other assets, as the case may be) to be purchased
as set forth below and an amount equal to any applicable tax or charge, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly: 

        (i)    requisition
from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-thousandths of a share of Preferred Stock to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one one-thousandths of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent), and the Company will direct the depositary agent to comply with such request; 

        (ii)   requisition
from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof; 

        (iii)  after
receipt of such certificates or depositary receipts, cause the same to be delivered to or, upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder; and 

        (iv)  after
receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. 

The
payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or bank draft payable to the
order of the Company. In the event that the Company is obligated to issue other securities (including Common Stock) of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when
appropriate or necessary to comply with this Agreement. The Company reserves the right to require prior to the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued. 

        (d)    NEW CERTIFICATES.    In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of Section 14 hereof. 

        (e)    ACQUIRING PERSON EXCEPTION.    Notwithstanding anything in this Agreement to the contrary, from and after the
first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by: 

        (i)    an
Acquiring Person or an Affiliate or Associate of an Acquiring Person; 

        (ii)   a
transferee of an Acquiring Person (or of any such Affiliate or Associate) who becomes a transferee after the Acquiring Person becomes such; or 

        (iii)  a
transferee of an Acquiring Person (or of any such Affiliate or Associate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or understanding (whether or not in 

9

 

writing)
regarding the transferred Rights or (B) a transfer which the Board has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance
of this Section 7(e), 

shall
become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. 

        (f)    LIMITATION.    Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered holder of a Rights Certificate upon the occurrence of any purported assignment or exercise as set forth in this
Section 7 unless such registered holder shall have (i) duly and properly completed and signed the certificate contained in the form of assignment or election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such assignment or exercise, (ii) tendered the Purchase Price (and an amount equal to any applicable tax or charge required to be paid
hereunder) to the Company in the manner set forth in Section 7(c), and (iii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request. 

Section 8.    CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.    All Rights Certificates surrendered for the purpose of
exercise, transfer, split-up, combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or,
if surrendered to the Rights Agent, shall be canceled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all canceled Rights Certificates to the Company. 

Section 9.    RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

        (a)    RESERVATION.    The Company will cause to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or other securities or out of its authorized and issued
shares held in its treasury), the number of shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities, as the case may be) that, as provided
in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights. 

        (b)    LISTING ON EXCHANGE.    So long as the shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities, as the case may be) issuable and deliverable upon the exercise of the Rights may be listed on any national securities exchange, the Company shall use all
reasonable efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange upon official notice of issuance upon such
exercise. 

        (c)    REGISTRATION STATEMENT.    The Company shall use its reasonable best efforts to (i) file, as soon as
practicable following the earlier of (A) the earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii) hereof, or (B) as soon as is required by law following the Distribution Date, a registration
statement on an appropriate form under the Securities Act, with respect to the Common Stock or other securities purchasable upon exercise of the Rights, (ii) cause such registration statement
to become effective as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (x) the date as of which the Rights are no longer exercisable for such securities, and (y) the date of the expiration of the Rights. The Company will
also take such action as may be appropriate under, or to ensure compliance with, the 

10

 

securities
or "blue sky" laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it
to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In addition, if the Company shall determine that a registration statement is required in other circumstances following the
Distribution Date, the Company similarly may temporarily suspend the exercisability of the Rights until such time as a registration statement has been declared effective. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, or the exercise thereof
shall not be permitted under applicable law, or a registration statement shall not have been declared effective. 

        (d)    DUE AUTHORIZATION.    The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all one one-thousandths of a share of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities, as the case may be) delivered
upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable. 

        (e)    TRANSFER TAXES.    The Company further covenants and agrees that it will pay when due and payable any and all
federal and state taxes and charges which may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for a number of one one thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however, be required to pay any tax or charge which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of one one thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that of the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates
for a number of one one thousandths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of
any Rights until such tax or charge shall have been paid (any such tax or charge being payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax or charge is due. 

Section 10.    STOCKHOLDER RIGHTS.    Each person in whose name any certificate for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such fractional shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable taxes or charges) was made; provided that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights Certificate, as such, shall not be entitled to any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein. 

Section 11.    ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR RIGHTS.    The Purchase Price, the number and kind
of shares, or fractions thereof, purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 

11

 

        (a)    ADJUSTMENT.    

        (i)    ADJUSTMENT OF PREFERRED STOCK.    In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the outstanding Preferred Stock, (C) combine or
consolidate the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of Preferred Stock (or other capital stock, as the case may be,) issuable on such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such date (whether or not such Right was then exercisable) and at a time when the transfer books for the Preferred Stock (or
other capital stock, as the case may be) of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, split,
combination, consolidation or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. 

        (ii)    ACQUIRING PERSON EVENT.    Unless the event causing such Person to become an Acquiring
Person is described in clause (x) or clause (y), below, in the event any Person shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person, then, promptly
following the
occurrence of such event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the result obtained by 

        (b)   multiplying
the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event (whether or not such Right was then issued or exercisable), and 

        (c)   dividing
that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the
"Adjustment Shares"). 

The
provisions of this Section 11(a)(ii) shall not apply if the event causing such Person to become an Acquiring Person is either: 

        (d)   a
transaction set forth in Section 13(a) hereof, or 

        (e)   an
acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by
at least a majority of the members of the Board who are not officers of the Company or any of its Subsidiaries and who are Continuing Directors, after receiving advice from one or more investment
banking firms, to be (1) at a price which is fair to the Company's stockholders and not inadequate (taking into account all factors which such members of the Board deem relevant, including,
without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (2) otherwise in the best
interests of the Company and its stockholders (a "Qualifying Offer"), 

        (i)    INSUFFICIENT SHARES.    In the event that the number of shares of Common Stock which
are authorized by the Company's Articles of Incorporation, but which are not outstanding or reserved for issuance for purposes other than upon exercise of the Rights, is not sufficient to 

12

 

permit
the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company, acting by resolution of the Board, shall: 

        (A)  determine
the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value"); and 

        (B)  with
respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Right and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without
limitation, shares or units of shares of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such
shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the
Board; provided that if the Company shall not have made adequate provision to deliver pursuant to this clause (B) cash, securities or other property described in clauses (1) through
(6) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right
of redemption pursuant to Section 23(a) hereof expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread. 

For
purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board determines in good faith that it is
likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of
such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that action is to be taken pursuant to the first and/or
third sentences of this Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and
(2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek such stockholder approval for such authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall promptly notify the
Rights Agent thereof in writing and shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement (with prompt
written notice thereof to the Rights Agent) at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of each Adjustment Share shall be the
Current Market Price (as defined in Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date, and the per share or per unit value of any Common
Stock Equivalent shall be deemed to equal the Current Market Price per share of the Common Stock on such date. Notwithstanding the foregoing provisions of this subparagraph (iii), in the event that,
pursuant to this subparagraph (iii), upon the exercise of the Rights the Company shall be required to deliver value in any form other than shares of Common Stock, such value shall be delivered only to
the extent and at the time that, if required, the approval by appropriate financial regulatory authorities with supervisory jurisdiction over the Company or its financial institution Subsidiaries of
such delivery of such value shall have been obtained. 

        (f)    ISSUANCE OF OPTIONS ON PREFERRED STOCK.    In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per share of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred
Stock or 

13

 

Equivalent
Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate subscription or offering price of the total number of shares of Preferred Stock
and/or Equivalent Preferred Stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price, and the
denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of consideration,
part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 

        (g)    ISSUANCE OF OTHER PROPERTY.    In case the Company shall fix a record date for a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a
regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a
share of Preferred Stock, and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock. Such adjustments shall
be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been
in effect if such record date had not been fixed. 

        (h)    CURRENT MARKET VALUE.    

        (i)    FOR COMMON STOCK.    For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to but not including such date. For purposes of computations
made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date; provided that in the event that the Current Market Price per share of the Common
Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock
or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination, consolidation, reverse stock split or reclassification of such Common
Stock, and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination, consolidation, reverse stock split or reclassification shall not
have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the Current Market Price
shall be 

14

 

properly
adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting
system or as quoted by the Nasdaq National Market with respect to securities listed or admitted to trading on another national securities exchange or quoted by the Nasdaq National Market,
respectively, or if the shares of Common Stock are not listed or admitted to trading on any national securities exchange or quoted by the Nasdaq National Market, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by The Nasdaq Stock Market or such other quotation system then in use, or,
if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in
the Common Stock selected by the Board. If on any such date the Common Stock is not publicly held and is not so listed, admitted to trading or quoted, and no market maker is making a market in the
Common Stock, "Current Market Price" per share of Common Stock shall mean the fair value of such shares on such date as determined in good faith by the Board, which determination shall be described in
a written statement filed with the Rights Agent and shall be conclusive for all purposes. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities
exchange, a Business Day. 

        (ii)    FOR PREFERRED STOCK.    Per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the next to last sentence thereof). If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed or admitted to trading or quoted in a manner described in clause (i) of this
Section 11(d), the Current Market Price per share of Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement) multiplied by the Current Market Price per share of the Common Stock.
If neither the Common Stock nor the Preferred Stock is publicly held or so listed or admitted to trading or quoted, the Current Market Price per share of the Preferred Stock shall mean the fair value
per share as determined in good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the Current Market Price of one one-thousandth of a share of Preferred Stock shall be equal to the Current Market Price of
one share of Preferred Stock divided by 1,000. 

        (i)    LIMITATION ON ADJUSTMENT.    Anything herein to the contrary notwithstanding, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or decrease in the Purchase Price of at least one percent (1%); provided that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date. 

        (j)    FURTHER ADJUSTMENT.    If as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the Purchase Price thereof (or the number of Rights) shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) hereof, and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares. 

15

   
        (k)    SUBSEQUENT ISSUANCE OF RIGHTS.    All Rights originally issued by the Company subsequent to any adjustment
made
to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a share of Preferred Stock purchasable from time
to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 

        (l)    CALCULATION OF PREFERRED STOCK.    Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to
the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandths of a share of Preferred Stock (calculated
to the nearest one-millionth) obtained by (i) multiplying (x) the number of one one-thousandths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price. 

        (m)    ALTERNATIVE ADJUSTMENT OF RIGHTS.    The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one one-thousandths of a share of Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest
one-ten-thousandth of a Right) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall promptly notify the Rights Agent thereof in writing and shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or
any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates
on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price)
and shall be registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement. 

        (n)    RIGHTS CERTIFICATES.    Irrespective of any adjustment or change in the Purchase Price or the number of one
one-thousandths of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price
per one one-thousandth of a share and the number of one one-thousandths of a share which were expressed in the initial Rights Certificates issued hereunder. 

        (o)    CORPORATE AUTHORIZATION.    Before taking any action that would cause an adjustment reducing the Purchase Price
below the then stated value, if any, of the number of one one-thousandths of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall use all reasonable efforts
to take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue, fully paid and nonassessable, such number of one
one-thousandths of a share of Preferred Stock at such adjusted Purchase Price. 

        (p)    DEFERRAL OF ISSUANCE.    In any case in which this Section 11 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer (and shall give prompt written notice of such election to the Rights Agent) until the
occurrence of such event the issuance to the holder of any Right exercised after such 

16

 

record
date of the number of one one-thousandths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the
number of one one-thousandths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment. 

        (q)    NON-TAXABLE ADJUSTMENTS.    Notwithstanding anything in this Section 11 to the contrary, the
Company shall be entitled to make such adjustments in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in its good faith
judgment the Board shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the Current Market Price, (iii) issuance wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred
Stock shall not be taxable to such stockholders. 

        (r)    LIMITATION ON REORGANIZATIONS.    The Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), (ii) merge with or
into any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a
series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger, sale or transfer, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates. 

        (s)    NO IMPAIRMENT.    The Company covenants and agrees that, after the Distribution Date, it will not, except as
permitted by Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. 

        (t)    ADJUSTMENT OF COMMON STOCK.    Notwithstanding anything in this Agreement to the contrary, in the event that
the Company shall at any time after the Rights Dividend Declaration Date and prior to the Distribution Date (i) declare a dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine or consolidate the outstanding shares of Common Stock into a smaller number of shares, the number of
Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date (or issued or delivered on or after the Distribution Date
pursuant to Section 22), shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the
occurrence of such event. 

Section 12.    CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.    Whenever an adjustment is made or any event
affecting the Rights or their exercisability (including, without limitation, an event which causes Rights to become null and void) occurs as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts and calculations accounting for such 

17

 

adjustment
or describing such event, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of such certificate, and
(c) if a Distribution Date has occurred, mail or cause the Rights Agent to mail a brief summary thereof to each holder of a Rights Certificate in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or statement therein contained and shall have no duty or liability with respect to and shall not be
deemed to have knowledge of any such adjustment or event unless and until it shall have received such certificate. 

Section 13.    CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.

        (a)    SECTION 13 EVENT.    In the event that, on or after the Stock Acquisition Date, directly or indirectly, 

        (i)    the
Company shall consolidate with, or merge with and into, any other Person or Persons (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, 

        (ii)   any
Person or Persons (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other securities of any other Person or Persons or cash or any other property, or 

        (iii)  the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole and calculated on the basis of the Company's most
recent regularly prepared financial statements) to any Person or Persons (other than the Company or any Subsidiary of the Company in one or more transactions each of which complies with
Section 11(o) hereof), 

then,
and in each such case (except as may be contemplated by Section 13(d) hereof), proper provision shall be made so that: 

        (iv)  each
holder of a Right, except as provided in Section 7(e) hereof, shall, from and after the later of (A) the date of the first occurrence of any such
Section 13 Event or (B) the date of the expiration of the period within which the Rights may be redeemed pursuant to Section 23 hereof (as the same may be amended), have the right
to receive, upon the exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid, nonassessable and
freely tradable shares of Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of one one-thousandths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of such one one-thousandths of a share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event
by the Purchase Price in effect immediately prior to such first occurrence), and (2) dividing that product (which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of such Section 13 Event; 

        (v)   such
Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; 

18

 

        (vi)  the
term "Company" shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section 13 Event; 

        (vii)    such
Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and 

        (viii)    the
provisions of Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13 Event. 

        (b)    PRINCIPAL PARTY.    A "Principal Party" shall mean: 

        (i)    in
the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted, changed or exchanged in such merger or consolidation, or if no securities are so issued, the Person that is the other party
to such merger or consolidation, or if the other party to the merger does not survive the merger, the Person that does survive the merger (including the Company, if it survives); and 

        (ii)   in
the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such transaction or transactions; 

        provided
that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, "Principal Party"
shall refer to such other Person; and (2) if the Common Stock of such Person is not and has not been so registered and such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and have been so registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value. 

        (c)    SUPPLEMENTAL AGREEMENT.    The Company shall not consummate any such Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of its Common Stock which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement confirming that the
requirements of Section 13(a) and Section 13(b) hereof shall promptly be performed in accordance with their terms and further providing that, as soon as practicable after the date of any
such Section 13 Event, the Principal Party will 

        (i)    prepare
and file a registration statement under the Securities Act, with respect to the Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date; and 

        (ii)   take
all such other action as may be necessary to enable the Principal Party to issue the securities purchasable upon exercise of the Rights, including but not limited
to the registration or qualification of such securities under all requisite securities laws of jurisdictions of the various states and the listing of such securities on such exchanges and trading
markets as may be necessary or appropriate; and 

        (iii)  deliver
to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act. 

        The
provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall
occur at any time after the 

19

 

occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a). 

        (d)    EXEMPT TRANSACTION.    Notwithstanding anything in this Agreement to the contrary, Section 13 shall not
be applicable to a transaction described in subparagraph (x) or (y) of Section 13(a) if (i) such transaction is consummated with a Person or Persons, or a wholly owned
subsidiary of any such Person or Persons, who acquired shares of Common Stock pursuant to a Qualifying Offer (as such term is defined in Section 11(a)(ii) hereof), (ii) the price
per share of Common Stock offered in such transaction is not less than the price per share of Common Stock paid to all holders of shares of Common Stock whose shares were purchased pursuant to such
Qualifying Offer and (iii) the form of consideration being offered to the remaining holders of shares of Common Stock pursuant to such transaction is the same as the form of consideration paid
pursuant to such Qualifying Offer. Upon consummation of any such transaction contemplated by this Section 13(d), all Rights hereunder shall expire. 

Section 14.    FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

        (a)    NO FRACTIONAL RIGHTS.    The Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(i) and Section 11(p) hereof, or to distribute Rights Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the fractional Rights otherwise issuable shall be rounded to the nearest whole number of Rights with one-half of a Right being rounded to the next highest whole Right. Any
determination under this Section 14(a) with respect to factional Rights shall be done on an aggregate basis taking into account all Rights held by such holder (i.e., such holder shall have no
more than one fractional Right). 

        (b)    NO FRACTIONAL SHARES OF PREFERRED STOCK.    The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the option of the Company, be evidenced by depositary
receipts) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred
Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market
value of one one-thousandth of a share of Preferred Stock. For purposes of this Section 14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred Stock, or if unavailable, the appropriate alternative price (in each case, as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise. 

        (c)    NO FRACTIONAL SHARES OF COMMON STOCK.    Following the occurrence of a Triggering Event, the Company shall not
be required to issue fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock. For purposes of this Section 14(c), the current market value of one share of Common Stock shall be the closing price of one share of Common
Stock, or if unavailable, the appropriate alternative price (in each case, as determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise. 

        (d)    WAIVER BY HOLDERS.    The holder of a Right by the acceptance of that Right expressly waives such holder's
right to receive any fractional Rights or any fractional shares upon exercise of a Right, except as permitted by this Section 14. 

        (e)    PAYMENTS.    Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent,
the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and/or formulas
utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully
protected in 

20

 

relying
upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional shares under any Section of this
Agreement relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies. 

Section 15.    RIGHTS OF ACTION.    All rights of action in respect of this Agreement, other than rights of action vested in
the Rights Agent pursuant to Section 18 hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in such holder's own behalf and for such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect of, such holder's right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this Agreement. 

        (a)   Notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as
a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, judgment, decree or ruling (whether interlocutory
or final) issued by a court or by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, that the Company must use all reasonable efforts to have any such
injunction, order, judgment, decree or ruling lifted or otherwise overturned as soon as possible. In the event that the Rights Agent has actual knowledge that it is unable to perform any of its
obligations pursuant to this Section 15(b), the Rights Agent will promptly notify the Company thereof. 

Section 16.    AGREEMENT OF RIGHTS HOLDERS.    Every holder of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that: 

        (a)   prior
to the Distribution Date, the Rights will be transferable only in connection with the transfer of shares of Common Stock; 

        (b)   after
the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates contained therein duly executed; 

        (c)   subject
to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificate or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be affected by any notice to the contrary; and 

        (d)   notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as
a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided that the Company must use its reasonable best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible. 

21

 

Section 17.    RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.    No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of the number of one one-thousandths of a share of Preferred Stock or any other securities of the Company which
may at any time be issuable upon the exercise of the Rights represented thereby, nor shall anything contained in this Agreement or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof. 

Section 18.    CONCERNING THE RIGHTS AGENT.

        (a)    COMPENSATION.    The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, administration, delivery,
execution and amendment of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including, without limitation, the reasonable fees and expenses of legal counsel), incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction), for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance
exercise, performance or administration of its duties under this Agreement, including, without limitation, the costs and expenses of defending against any claim of liability in the premises. The costs
and expenses incurred by the Rights Agent in enforcing this right of indemnification shall be paid by the Company; provided, however, that if the Rights Agent is found to have acted with gross
negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction), the Company shall have no obligation to pay such costs and expenses incurred by the Rights Agent. The provisions of this Section 18 and Section 20 below
shall survive the termination of this Agreement, the exercise or expiration of the Rights and the resignation, replacement or removal of the Rights Agent. 

        (b)    LIMITATION OF LIABILITY.    The Rights Agent shall be authorized and protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Agreement or the exercise or performance of its duties hereunder in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof
hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take any action in connection therewith unless and until it has received such notice. 

Section 19.    MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.

        (a)    MERGER OR CONSOLIDATION.    Any Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to
business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part
of any of the parties hereto, but only if such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may 

22

 

adopt
the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 

        (b)    CHANGE OF NAME.    If at any time the name of the Rights Agent shall be changed and at such time any of the
Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 

Section 20.    DUTIES OF RIGHTS AGENT.    The Rights Agent undertakes to perform only the duties and obligations expressly
imposed on the Rights Agent by this Agreement (and no implied duties or obligations) upon the following terms and conditions. By its execution of this Agreement, the Company agrees to be bound by all
of such terms and conditions. By their acceptance of the Rights Certificate, each of the holders of Rights Certificates agrees to be bound by all of such terms and conditions. 

        (a)    CONSULTATION WITH COUNSEL.    The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company or any employee of the Rights Agent), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and, provided the Rights Agent has
not acted in bad faith, the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it in accordance with such advice or opinion. 

        (b)    RELIANCE ON COMPANY.    Whenever in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Current Market Price) be proved or established by
the Company prior to taking, suffering or omitting any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of the Board, any Vice Chairman, the President, any Executive or Senior Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full and complete authorization to the Rights Agent and provided the
Rights Agent has not acted in bad faith, the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it under the provisions of this Agreement in reliance
upon such certificate. 

        (c)    GROSS NEGLIGENCE.    The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever
(including, but not limited to, lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage. Any and all liability of the Rights Agent under this Agreement shall
not exceed $75,000. 

        (d)    RELIANCE.    The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals
contained in this Agreement or in the Rights Certificates, nor shall it be required to verify the same (except as to its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only. 

        (e)    RELIANCE ON AGREEMENT.    The Rights Agent shall not have any liability for or be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming null and void hereunder) or any adjustment required under the provisions of Section 11,
Section 13 or Section 24 hereof or responsible for the manner, method or amount of any such 

23

 

adjustment
or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after receipt by the
Rights Agent of a certificate describing any such adjustment, upon which the Rights Agent may rely); nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common Stock or Preferred
Stock will, when so issued, be validly authorized and issued, fully paid and nonassessable. 

        (f)    COMPANY COVENANT.    The Company will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement. 

        (g)    COMPANY INSTRUCTIONS.    The Rights Agent is hereby authorized and directed to accept instructions with respect
to the performance of its duties hereunder from any one of the Chairman of the Board, any Vice Chairman, the President, any Executive or Senior Vice President, the Secretary, any Assistant Secretary,
the Treasurer, or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and such instructions shall be full authorization and
protection to the Rights Agent, and the Rights Agent shall not be liable for any action taken, suffered or omitted by it in accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to
be taken, suffered or omitted by the Rights Agent with respect to its duties or obligations under this Agreement and the date on and/or after which such action shall be taken, suffered or omitted and
the Rights Agent shall not be liable for any action taken, suffered or omitted in accordance with a proposal included in any such application on or after the date specified therein (which date shall
not be less than fourteen Business Days after the date indicated in such application unless any such officer shall have consented in writing to an earlier date) unless, prior to taking, suffering or
omitting any such action (or the effective date in case of an omission), the Rights Agent has received written instructions in response to such application specifying the action to be taken, suffered
or omitted. 

        (h)    DEALING IN RIGHTS.    The Rights Agent and any stockholder, Affiliate, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company, or become pecuniarily interested in any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing in this Agreement shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other Person or legal entity. 

        (i)    ATTORNEYS AND AGENTS.    The Rights Agent may execute and exercise any of the rights or powers hereby vested in
it or perform any duty hereunder either itself (through its directors, officers and employees) or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company or any other Person resulting from any such act, default, neglect or misconduct, absent gross
negligence, bad faith or willful misconduct in the selection and continued employment thereof (which gross negligence or bad faith must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction). 

        (j)    NO FINANCIAL LIABILITY.    No provision of this Agreement shall require the Rights Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of any of its duties hereunder (other than internal costs incurred by the Rights Agent in providing services to the Company in
the ordinary course of its business as Rights Agent) or in the exercise of its rights if it believes that repayment of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it. 

        (k)    RESTRICTION ON ACTION.    If, with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative 

24

 

response
to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 

Section 21.    CHANGE OF RIGHTS AGENT.

        (a)    RESIGNATION.    The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' written notice mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and, if
such resignation occurs after the Distribution Date, to the registered holders of the Rights Certificates by first-class mail. 

        (b)    REMOVAL.    The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days'
written notice mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and, if
such removal occurs after the Distribution Date, to the holders of the Rights Certificates by first-class mail. 

        (c)    APPOINTMENT OF SUCCESSOR RIGHTS AGENT.    If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice
of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. 

        (d)    SUCCESSOR RIGHTS AGENT.    Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (i) a legal business entity organized and doing business under the laws of the United States or of any state of the United States, in good standing, which is authorized under such laws
to exercise corporate trust powers and is subject to supervision or examination by a federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (ii) an Affiliate of a legal business entity described in clause (i) of this sentence. 

        (e)    AUTHORITY OF SUCCESSOR RIGHTS AGENT.    After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and shall execute and deliver any further assurance, conveyance, act or deed necessary for that purpose. Not later than the
effective date of any such appointment, the Company shall file written notice thereof with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and, if
such appointment occurs after the Distribution Date, mail a written notice thereof to the registered holders of the Rights Certificates. 

        (f)    NO DELAY.    Failure to give any notice provided for in this Section 21, or any defect in any such
notice, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 

Section 22.    ISSUANCE OF NEW RIGHTS CERTIFICATES.    Notwithstanding any of the provisions of this Agreement, any Rights
Certificate or the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or expiration of the Rights, the Company shall: 

        (a)   with
respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, granted or awarded as of
the Distribution Date, or upon the exercise, conversion or exchange of securities hereafter issued by the Company; and 

25

 

        (b)   may,
in any other case, if deemed necessary or appropriate by the Board, issue Rights Certificates representing the appropriate number of Rights in connection with such
issuance or sale; provided that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof. 

Section 23.    REDEMPTION AND TERMINATION.    

        (a)    REDEMPTION PERIOD.    The Board may, at its option, at any time prior to the earlier of: 

        (i)    the
close of business on the twentieth (20th) day following the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record Date,
the close of business on the twentieth (20th) day following the Record Date), or 

        (ii)   the
Final Expiration Date, 

direct
the Company to, and if directed, the Company shall redeem all, but not less than all, of the then outstanding Rights at a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the Current Market Price, as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board. 

        (b)    REDEMPTION PROCEDURE.    Immediately upon the action of the Board directing the Company to redeem the Rights,
evidence of which shall have been filed with the Rights Agent, and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board directing the Company to redeem the Rights, the Company shall give written
notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to each such holder at such holder's last address as it appears upon the registry
books of the Rights Agent, or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. 

        (c)    REDEMPTION AFTER CHANGE OF BOARD.    Notwithstanding the provisions of Section 23(a) hereof, if, within
270 days of a public announcement by a third party of an intent or proposal to engage (without the current and continuing concurrence of the Board) in a transaction involving an acquisition of
or business combination with the Company or otherwise to become an Acquiring Person, there is an election of Directors (whether at one or more stockholder meetings and/or pursuant to written
stockholder consent) resulting in a majority of the Board being comprised of persons who were not
nominated by the Board in office immediately prior to such election, then following the effectiveness of such election for a period of 180 days (the "Special Period") the Rights, if otherwise
then redeemable absent the provisions of this paragraph (c), shall be redeemable upon either of the following conditions being satisfied, but not otherwise: 

        (i)    by
a vote of a majority of the Directors then in office, provided that 

        (A)  before
such vote, the Board shall have implemented the Value Enhancement Procedures (as defined below) and 

        (B)  promptly
after such vote, the Company publicly announces such vote and 

        (1)   the
manner in which the Value Enhancement Procedures were implemented, 

        (2)   any
material financial, business, personal or other benefit or relationship (an "Interest") which each Director and each Affiliate of such Director (identifying each
Director and Affiliate separately in relation to each such Interest) has in connection with 

26

 

any
suggested, proposed or pending transaction with or involving the Company (a "Transaction"), or with any other party or Affiliate of any other party to a Transaction, where such Transaction would
or might, or is intended to, be permitted or facilitated by redemption of the Rights (an "Affected Transaction"), other than treatment as a stockholder on a pro rata basis with other stockholders or
pursuant to compensation arrangements as a director or employee of the Company or a subsidiary which have been previously disclosed by the Company, 

        (3)   the
individual vote of each Director on the motion to redeem the Rights, and 

        (4)   the
statement of any Director who voted for or against the motion to redeem the Rights and desires to have a statement included in such announcement, or 

        (ii)   if
clause (i) is not applicable, by a vote of a majority of the Directors then in office, provided that 

        (A)  if
there is a challenge to the Directors' action approving redemption and/or any related Affected Transaction as a breach of the fiduciary duty of care or loyalty, the
Directors, solely for purposes of determining the effectiveness of such redemption pursuant to this clause (ii), are able to establish the entire fairness of such redemption and, if applicable,
such related Affected Transaction, and 

        (B)  the
Company shall have publicly announced the vote of the Board approving such redemption and, if applicable, such related Affected Transaction, which announcement shall
set forth the information prescribed by clauses (A) (II) (b), (c) and (d) above. 

        (d)    VALUE ENHANCEMENT PROCEDURE.    "Value Enhancement Procedures" shall mean: 

        (i)    the
selection by the Board of an independent financial advisor (the "Independent Advisor") from among financial advisors which have national standing, have established
expertise in advising on mergers, acquisitions and related matters and have no Interest relating to an Affected Transaction, and have not during the preceding year provided services to, been engaged
by or been a financing source for any other party to an Affected Transaction or any Affiliate of any such party or of any Director (other than the Company and its subsidiaries); 

        (ii)   whether
or not there is a then-pending Affected Transaction, the receipt by the Board from its Independent Advisor of (a) such advisor's view
(expressed in such form and subject to such qualifications and limitations as the Independent Advisor deems appropriate) regarding whether redemption of the Rights will serve the best interests of the
Company and its stockholders or (b) such advisor's statement that it is unable to express such a view, setting forth the reasons therefor; 

        (iii)  if
there is a then-pending Affected Transaction, 

        (A)  the
establishment and implementation by the Board, with the advice of its Independent Advisor, of a process and procedures which the Board and such advisor conclude
would be most likely to result in the best value reasonably available to stockholders (regardless of whether such Affected Transaction involves a "sale of control" or "break-up" of the
Company for California law purposes), 

        (B)  the
Board (I) receiving the opinion of its Independent Advisor, in customary form and content for transactions of the type involved, that the Affected Transaction
is fair to the Company's stockholders from a financial point of view and (II) determining, and the Independent Advisor confirming, that it has no reason to believe that a superior transaction
is reasonably available for the benefit of the Company's stockholders, and 

        (C)  the
execution of a definitive transaction agreement and other definitive documentation necessary to effect the Affected Transaction. 

        (e)    EXCLUSIVE PROCEDURE.    Neither the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 and other than in connection with the purchase or repurchase by any of them of
Common Stock prior to the Distribution Date. 

27

 

Section 24.    EXCHANGE.

        (a)    RIGHT TO EXCHANGE.    At any time after the first occurrence of a Section 11(a)(ii) Event, the
Board may, at its option, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of
Section 7(e) hereof) for Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred to as the "Exchange Ratio"); provided that if the Board authorizes such exchange of the Rights at any time on or after
the earlier of (i) the earliest time that any Person becomes an Acquiring Person or (ii) the first occurrence of either of the circumstances described in clauses (i) and
(ii) of Section 23(c) hereof, there must be at least one Continuing Director then in office and such authorization shall require the approval of a majority of the Continuing Directors
then in office. Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Stock for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Stock then outstanding. 

        (b)    EXCHANGE PROCEDURE.    Immediately upon the action of the Board ordering the exchange of any Rights pursuant to
Section 24(a) above, and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be
to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such
exchange (with prompt written notice thereof to the Rights Agent); provided that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of Rights. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become null and void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights. 

        (c)    SUBSTITUTE PREFERRED STOCK.    In any exchange pursuant to this Section 24, the Company, at its option,
may substitute Preferred Stock (or Equivalent Preferred Stock, as such term is defined in Section 11(b) hereof) for Common Stock exchangeable for Rights, at the initial rate of one
one-thousandth of a share of Preferred Stock (or Equivalent Preferred Stock) for each share of Common Stock, as appropriately adjusted to reflect stock splits, stock dividends and other
similar transactions after the date hereof. 

        (d)    INSUFFICIENT SHARES.    In the event that the number of shares of Common Stock which are authorized by the
Company's Articles of Incorporation but which are not outstanding or reserved for issuance for purposes other then upon exercise of the Rights is not sufficient to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Board shall take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exchange of the
Rights. 

        (e)    NO FRACTIONAL SHARES.    The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of such fractional shares of Common Stock, there shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional shares of Common Stock would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock. For
the purposes of this Section (e), the current market value of a whole share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to but not including the date of exchange pursuant to this Section 24. 

28

 

Section 25.    NOTICE OF CERTAIN EVENTS.

        (a)    NOTICE.    In case the Company shall propose, at any time after the Distribution Date: 

        (i)    to
pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a
regular periodic cash dividend out of earnings or retained earnings of the Company), or 

        (ii)   to
offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class
or any other securities, rights or options, or 

        (iii)  to
effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision or split of outstanding shares of Preferred Stock),
or 

        (iv)  to
effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of related transactions, of 50% or
more of the assets or earning power of the Company and/or its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), or 

        (v)   to
effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible, a notice of such proposed action (with prompt written notice thereof to the Rights Agent). The notice shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed. In the case of any action covered by clause (i) or (ii) above, such notice shall
be given at least twenty (20) days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action. In the case of any such other action, such
notice shall be given at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier. 

        (b)    NOTICE OF SECTION 11(A)(II) EVENT.    In case any Section 11(a)(ii) Event shall
occur, then in any such case, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights Certificate, to the extent feasible, a notice of the occurrence of such
event (with prompt written notice thereof to the Rights Agent), which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and
(ii) all references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities. 

Section 26.    NOTICES.

        (a)    NOTICE TO THE COMPANY.    Notices or demands authorized by this Agreement to be given or made by the Rights
Agent or by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent by the Company) or by facsimile transmission as follows: 

Pacific
Capital Bancorp

200 East Carrillo, Suite 300

P.O. Box 1119

Santa Barbara, California 93102

Attention: Corporate Secretary

Facsimile No.: 805 882-3856 

with
a copy to: 

Reicker,
Pfau, Pyle, McRoy & Herman LLP

P.O. Box 1470

Santa Barbara, California 93101-1470

Attn: Andrew D. Simons, Esq.

Facsimile No.: (805) 966-3320 

29

 

        (b)    NOTICE TO RIGHTS AGENT.    Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Rights Agent with the Company) or by facsimile as follows: 

Mellon
Investor Services LLC

235 Montgomery Street, 23rd Floor

San Francisco, California 94104

Attn: Relationship Manager

Facsimile No.: (415) 989-5241 

with
a copy to: 

Mellon
Investor Services LLC

85 Challenger Road

Ridgefield Park, New Jersey 07660-2108

Attn: General Counsel

Facsimile No.: (201) 296-4004 

        (c)    NOTICE TO RIGHTS HOLDER.    Notices or demands authorized by this Agreement to be given or made by the Company
or the Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder of any certificate representing shares of Common Stock) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. 

        (d)    DELIVERY.    Any notice given by the Company or the Rights Agent shall be deemed delivered as of the date on
which it is deposited with the U.S. Postal Service if mailed in accordance with the provisions of this Section 26. Any notice given by the holder of any Rights shall be deemed delivered five
(5) days after the date on which it is deposited with the U.S. Postal Service if mailed in accordance with the provisions of this Section 26; provided that any notice of exercise of any
Rights shall be deemed delivered as of the date determined under Section 7 hereof. 

Section 27.    SUPPLEMENTS AND AMENDMENTS.

        (a)    RIGHT TO AMEND.    Prior to the Distribution Date, and subject to the next to last sentence of this
Section 27(a) and the provisions of Sections 27(b) and 27(c) hereof, the Company and the Rights Agent shall subject to the other terms and conditions of this Agreement, if the Company so
directs, supplement or amend any provision of this Agreement (including, without limitation, any extension of the period in which the Rights may be redeemed, any increase in the Purchase Price and any
extension of the Final Maturity Date) without the approval of any holders of certificates representing shares of Common Stock. From and after the Distribution Date, and subject to the next to last
sentence of this Section 27(a) and the provisions of Sections 27(b) and 27(c) hereof, the Company and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, that this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights
may be redeemed, or to modify the ability (or inability) of the Board (with, where required, the concurrence of a majority of the Continuing Directors) to redeem the Rights, in either case at such
time as the Rights are not then redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights (other than an Acquiring Person or any Affiliate or Associate of an Acquiring Person). Notwithstanding anything contained in this Agreement to the contrary, no supplement or
amendment shall be made which changes the Redemption Price or the number of one one-thousandths of a share of Preferred Stock for which a Right is exercisable. Prior to 

30

 

the
Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Stock. 

        (b)    RESTRICTION.    Notwithstanding anything contained in this Agreement to the contrary, for a period of one
hundred and eighty (180) days following the first occurrence of either of the circumstances described in clause (i) and clause (ii) of Section 23(c) hereof, no supplement
or amendment shall be made to this Agreement under any circumstances. 

        (c)    CONTINUING DIRECTOR.    Notwithstanding anything contained in this Agreement to the contrary, at any time
following the expiration of the 180-day period under Section 27(b) above, this Agreement may be amended or supplemented only if there is at least one Continuing Director then in
office and only if a majority of the Continuing Directors then in office concurs with such amendment or supplement. 

        (d)    EXECUTION.    Upon the delivery of a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this Section 27, and, provided that such supplement or amendment does not change or increase the Rights Agent's rights,
duties, liabilities or obligations, the Rights Agent shall execute such supplement or amendment. 

Section 28.    SUCCESSORS.    All the covenants and provisions of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 

Section 29.    DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.    For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board (with, where specifically provided for herein, the concurrence of the Continuing Directors) shall have the exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board (with, where specifically provided for herein, the concurrence of the Continuing Directors) or to the Company, or as may be necessary or advisable
in the administration of this Agreement, including, without limitation, the right and power to (a) interpret the provisions of this Agreement, and (b) make all determinations and
calculations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board (with, where
specifically provided for herein, the concurrence of the Continuing Directors) in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board, any of the directors on the Board or the Continuing Directors to any liability to the holders of the Rights. The Rights Agent shall
always be entitled to assume that the Company's Board of Directors acted in good faith and shall be fully protected and incur no liability in reliance thereon. 

Section 30.    BENEFITS OF THIS AGREEMENT.    Nothing in this Agreement shall be construed to give to any Person other than
the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock). 

Section 31.    SEVERABILITY.    If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided that, notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held
by such court or authority to be invalid, void or unenforceable and the Board determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be 

31

 

reinstated
and shall not expire until the close of business on the fifteenth (15th) day following the date of such determination by the Board. Without limiting the foregoing, if any provision of this
Agreement requiring that a determination be made by, or with the concurrence of, less than the entire Board is held by any court of competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board in accordance with applicable law and the Company's Articles of Incorporation and By-laws. 

Section 32.    GOVERNING LAW.    This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of California and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be
performed entirely within such State; provided, however, that all provisions regarding the rights, duties and obligations of the Rights Agent shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed entirely within such state. 

Section 33.    COUNTERPARTS.    This Agreement may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 

Section 34.    DESCRIPTIVE HEADINGS.    Descriptive headings of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of any of the provisions hereof 

        IN WITNESS WHEREOF, the parties hereto have caused this Stockholders Rights Agreement to be duly executed and attested as of the day and
year first above written. 

	 	 	PACIFIC CAPITAL BANCORP
	

 	
 	

 	

 
	 	 	By:	

	 	 	Name:	

	 	 	Title:	

	

 	
 	

 	

 
	Attest:	 	 	 
	

 	
 	

 	

 
	
 Jay D. Smith, Corporate Secretary	 	 	 
	

 	
 	

 	

 
	 	 	MELLON INVESTOR SERVICES LLC,

as Rights Agent
	

 	
 	

 	

 
	 	 	By:	

	 	 	Name:	

	 	 	Title:	

32

QuickLinks

Exhibit 4.1

AMENDED AND RESTATED STOCKHOLDERS RIGHTS AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.1.1    
    

 
 

PACIFIC CAPITAL BANCORP
  
    MANAGEMENT RETENTION PLAN
  
    as amended effective
  February 27, 2003    
    

TABLE OF CONTENTS  

	Section
 
	 	 
	 	Page

	1.	 	Establishment of Plan	 	1
	

2.	
 	

Definitions	
 	

1
	

3.	
 	

Eligibility and Participation	
 	

8
	

4.	
 	

Severance Benefits	
 	

9
	

5.	
 	

Excise Tax and Non-Deductibility Limitations	
 	

11
	

6.	
 	

Employment Status; Withholding	
 	

13
	

7.	
 	

Successors	
 	

14
	

8.	
 	

Term and Termination	
 	

15
	

9.	
 	

Amendment	
 	

16
	

10.	
 	

Plan Administration	
 	

16
	

11.	
 	

Rules for Determining Annual Compensation	
 	

18
	

12.	
 	

Notices	
 	

18
	

13.	
 	

Miscellaneous Provisions	
 	

19
	

14.	
 	

ERISA Required Information	
 	

20

   PACIFIC CAPITAL BANCORP

MANAGEMENT RETENTION PLAN

(As amended effective February 27, 2003)  

Establishment of Plan.  

Establishment of Plan. As of the Effective Date, Pacific Capital Bancorp, a California corporation ("Bancorp"), hereby establishes a management
retention plan to be known as the "Management Retention Plan" (the "Plan"), as set forth in this document. As of the Amendment Date, Bancorp amends and restates this Plan to read as set forth in this
document. 

Purpose of Plan. It is expected that in the future Bancorp or one or more of its subsidiaries may have to consider the possibility of their acquisition
by another company or the impact of the occurrence of another change of control event. Bancorp recognizes that such consideration can be a distraction to key employees of Bancorp and its subsidiaries
and can cause such employees to consider alternative employment opportunities. Bancorp has determined that it is in the best interests of Bancorp and its shareholders to assure that it will have the
continued dedication and objectivity of the employees of Bancorp and its subsidiaries, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) and to provide
such employees with an incentive to continue their employment and to motivate such employees to maximize the value of Bancorp and its subsidiaries upon a Change of Control for the benefit of Bancorp's
shareholders. The purpose of this Plan is to secure the continued dedication and objectivity of such employees by providing such incentive and motivation through the provision of certain severance
benefits upon a termination of employment following a Change of Control. 

Applicability of Plan. Subject to the terms of this Plan, the benefits provided by this Plan shall be available only to those eligible Employees who, on
or after the Effective Date, receive, execute and return to Bancorp a Notice of Participation. 

Definitions. Whenever used in this Plan or any Notice of Participation, the following terms shall have the meanings set forth below. 

"Amendment Date" means February 27, 2003, the date on which the amendment of this Plan was approved by the Governance & Compensation
Committee of the Board of Directors of Bancorp. 

"Average Annual Compensation" for any Participant means an amount equal to the average of the Participant's annual cash salary and cash bonuses and
commissions payable for each of the three (3) full Fiscal Years ended immediately prior to the date of the Termination of Employment as a result of which the Participant is entitled to receive
a Severance Payment under this Plan; provided that, if the Termination of Employment occurs during the fourth quarter of any Fiscal Year, the Participant's Average Annual Compensation shall be an
amount equal to the greater of: 

the
average of the Participant's annual cash salary and cash bonuses and commissions payable for each of the three (3) full Fiscal Years ended immediately prior to the Termination of
Employment; and 

the
average, determined on the basis of the number of Fiscal Years considered, of the sum of (i) the Participant's annual cash salary and cash bonuses and commissions payable for each of the
two (2) full Fiscal Years ended immediately prior to the Termination of Employment, and (ii) the sum of (x) the annualized cash salary that would be payable to the Participant for
the Fiscal Year in which the Termination of Employment occurs determined on the basis of the monthly salary payable to the Participant for such Fiscal Year and (y) the amount of the cash
bonuses and commissions paid to the Participant with respect to the immediately preceding Fiscal Year. 

1

 

If,
at the time of the Termination of Employment, the Participant has been employed with Bancorp or the Bank for a period of less than three (3) full Fiscal Years, the number of full Fiscal
Years that the Participant has been an employee of Bancorp or the Bank shall be substituted for the foregoing references to "three (3) full Fiscal Years of such Company." Section 0 of
this Plan sets forth certain provisions for determining a Participant's Average Annual Compensation. 

"Bancorp" means Pacific Capital Bancorp, a California corporation. 

"Bank" means Pacific Capital Bank, National Association and its Subsidiaries. When used in reference to an Employee or Participant or action or
structure of the employer of the Employee or Participant,
the term, "Bank" means whichever of Pacific Capital Bank, National Association or its Subsidiaries employs the Employee or Participant. 

"Board of Directors" means the Board of Directors of Bancorp or the Bank, as appropriate, as constituted as of the time of the action in question. 

Cause.  

"Cause" means (i) any act of personal dishonesty taken by the Participant in connection with his or her responsibilities as an Employee and
intended to result in substantial personal enrichment of the Participant, (ii) the Participant's conviction of a felony, (iii) a willful act by the Participant which constitutes gross
misconduct and which is injurious to Bancorp or the Bank, or (iv) continued substantial violations by the Participant of the Participant's employment duties which are demonstrably willful and
deliberate on the Participant's part after there has been delivered to the Participant a written demand for performance which specifically sets forth the factual basis for Bancorp's or the Bank's
belief that the Participant has not substantially performed his or her duties; provided that cause shall not be deemed to exist under clause (iii) or (iv) of this Section unless and
until (x) there shall have been delivered to the Participant a written notice stating that the Participant was guilty of the conduct described in such clause and specifying the particulars
thereof in detail and (y) the Participant shall have been provided an opportunity to be heard by the Board of Directors (with the assistance of the Participant's counsel if the Participant so
desires). 

Notwithstanding
anything in this Plan to the contrary, no act or omission on the Participant's part shall be considered "willful" or "deliberate" unless the Participant has acted, or failed to act,
with an absence of good faith and without a reasonable belief that his or her action or failure to act was in the best interest of Bancorp or the Bank. 

Change of Control.  

"Change of Control" means the occurrence of any of the following events: 

An
acquisition of any voting securities of Bancorp or the Bank 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 twenty percent (20%) or more of the combined voting power of Bancorp or the Bank's then outstanding voting securities; provided that in determining whether a Change of Control has
occurred, voting securities which are acquired in a Non-Control Acquisition shall not constitute an acquisition which would cause a Change of Control; 

A
cumulative change in the composition of the Board of Directors of Bancorp or the Bank 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 

2

 

Directors
of Bancorp or the Bank (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 Bancorp or the Bank of: 

A
merger, consolidation or reorganization involving Bancorp or the Bank, unless such merger, consolidation or reorganization is or would be a Non-Control Transaction; 

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

An
agreement for the sale or other disposition of all or substantially all of the assets of Bancorp or the Bank to any person other than one or more Subsidiaries of Bancorp or the Bank. 

If
any of the events described in Section 0 above occur with respect to Bancorp or the Bank, a Change of Control shall be deemed to have occurred. 

Notwithstanding
the foregoing, a Change of Control shall not be deemed to occur solely because any person (the "Subject Person") acquired beneficial ownership of more than the permitted amount of the
then outstanding voting securities of Bancorp or the Bank as a result of the acquisition of its voting
securities by Bancorp or the Bank which, by reducing the number of its voting securities then outstanding, increases the proportional number of voting securities beneficially owned by the Subject
Person; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by Bancorp or the Bank, and, after such
acquisition by Bancorp or the Bank, the Subject Person becomes the beneficial owner of any additional voting securities of Bancorp or the Bank which increases the percentage of the then outstanding
voting securities beneficially owned by the Subject Person, then a Change of Control shall occur. 

Change of Control Date.  

"Change of Control Date" means the earliest of: 

the
date on which the Change of Control occurs; 

the
date on which Bancorp or the Bank executes an agreement, the consummation of which would result in the occurrence of a Change of Control; 

the
date on which the Board of Directors of Bancorp or the Bank approves a transaction or series of transactions, the consummation of which would result in a Change of Control; or 

the
date Bancorp fails to satisfy its obligations to have this Plan assumed by any successor to Bancorp or the Bank involved in the Change of Control in accordance with Section 0 hereof. 

If
the Change of Control Date occurs as a result of an agreement described in clause (B) of Section 0. above or as a result of the approval of the Board of Directors described in
clause (C) of Section 0. above and the Change of Control to which such agreement or approval relates (the "Contemplated Change of Control") subsequently is abandoned or does not occur
(regardless of the reason for such abandonment or failure of occurrence), then effective as of the date (the "Reset Date") of adoption of a resolution of the Board of Directors approved by
three-fourths (3/4ths) of the Incumbent Directors then in office certifying that the Contemplated Change of Control is not reasonably likely to occur, neither the Change of Control nor the Change of
Control Date shall be deemed to have occurred for any purposes under this Plan; provided that this sentence shall not apply (i) to any Participant whose Termination of Employment with whichever
of Bancorp or the Bank is effected by such Change of Control has occurred on and after the Change of Control Date and on or prior to the Reset Date or 

3

 

(ii) if
the Contemplated Change of Control subsequently occurs within three (3) months of the Reset Date. Following the Reset Date, the provisions of this Plan shall remain in effect
until this Plan is terminated in accordance with the provisions of Section 0 hereof, and a new Severance Window Period shall commence upon the occurrence of a subsequent Change of Control Date. 

Notwithstanding
anything in Section 0, above, to the contrary, if a Participant's employment with whichever of Bancorp or the Bank is effected by such Change of Control terminates prior to the
Change of Control Date (regardless of whether or not the contemplated Change of Control is subsequently abandoned or does not occur and whether or not a Reset Date is established) and it is reasonably
demonstrated that such termination of employment (x) was at the request of the third party who has taken steps reasonably calculated to effect the Change of Control or (y) otherwise
arose in connection with or in anticipation of the Change of Control, then, solely with respect to the affected Participant, the Change of Control Date means the date immediately prior to the date of
such Participant's Termination of Employment and Section 0 above shall not apply. 

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

"Designated Agent" means the agent designated by Bancorp from time to time as the person to whom notices and other written communications to Bancorp or
the Bank, including, but not limited to, a notice of appeal under Section 0 hereof, shall be delivered. As of the Amendment Date, the Designated Agent is Bancorp's General Counsel. 

"Disability" means that the Participant has been unable to perform all of his or her duties as an Employee as the result of incapacity due to physical
or mental illness, and that it has been determined that such inability is total and permanent, which determination shall be made by a physician selected by Bancorp or its insurers and acceptable to
the Participant or the Participant's legal representative (such agreement as to acceptability not to be unreasonably withheld). 

"Effective Date" means November 24, 1998, the date on which this Plan was approved by the Board of Directors of Bancorp. 

"Employee" means an individual employed by Bancorp or the Bank. For purposes of this Plan, the Chairman of the Board of Directors and the
Vice-Chairman of the Board of Directors of Bancorp shall be deemed to be employed by Bancorp. 

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 

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

"Fiscal Year" means the fiscal year of Bancorp. 

"Incumbent Directors" for Bancorp or the Bank means Directors of Bancorp or the Bank who either (i) are Directors as of the Effective Date, or
(ii) are elected, or nominated for election, to the Board of Directors by the affirmative vote of at least a majority of the Incumbent Directors at the time of such election or nomination;
provided that, for purposes of clause (ii) of this Section, an individual whose election or nomination is effected in connection with an actual or threatened Proxy Contest relating to the
election of Directors shall not be considered an Incumbent Director. 

"Involuntary Termination" means any of the following: 

a
Termination of Employment for Cause or as a result of the Employee's death or Disability; 

without
the Participant's express written consent, the significant reduction of the Participant's duties or responsibilities relative to the Participant's duties or responsibilities in effect
immediately prior to such reduction; 

a
reduction by more than twenty-five percent (25%) in the aggregate amount of the annual base salary and annual cash bonuses or commissions payable to the Participant for any Fiscal Year
relative to his 

4

 

or
her annual base salary and annual cash bonuses or commissions for the immediately preceding Fiscal Year, 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 either or both of Bancorp or the Bank; 

a
material reduction in the kind or level of employee benefits to which the Participant is entitled with the result that the Participant's overall benefits package is significantly reduced from that
to which he or she was entitled immediately prior to such reduction, unless the reduction in the employee benefits results primarily from a proportionate reduction in the employee benefits available
to Employees based on the performance of either or both of Bancorp or the Bank; 

without
the Participant's express written consent, the termination of the Participant's status as a member of the Leadership Council of Bancorp or the Bank; 

without
the Participant's express written consent, the relocation of the Participant's principal place of employment to a facility or a location more than thirty-five (35) miles
from the Participant's then present principal place of employment; 

any
purported termination of the Participant's employment which is not effected for Cause or as a result of the Participant's death or Disability; or 

the
failure of Bancorp to obtain the assumption of this Plan by any successor to Bancorp or the Bank which is involved in the Change of Control. 

Notwithstanding
anything in this Plan to the contrary, the transfer of a Participant's employment from Bancorp or the Bank to any of its Subsidiaries shall not by itself be considered an Involuntary
Termination described in clause 0 or clause 0 of this Section. 

"Leadership Council" with respect to Bancorp or the Bank means the team of senior employees which is designated from time to time by the Chief Executive
Officer of such entity, is a direct report of the CEO and which is generally responsible for the management of all operating and support areas of the Company. 

"Non-Control Acquisition" means an acquisition of any voting securities of Bancorp or the Bank by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by Bancorp or the Bank, (ii) Bancorp or any of its Subsidiaries, or (iii) any person in connection with a Non-Control Transaction. 

Non-Control Transaction.  

"Non-Control Transaction" means a merger, consolidation or reorganization of Bancorp or the Bank where: 

the
shareholders of Bancorp or the Bank, immediately before such merger, consolidation or reorganization, own, directly or indirectly, immediately after such merger, consolidation or reorganization,
in substantially the same proportion as their ownership of the voting securities of Bancorp or the Bank immediately before such merger, consolidation or reorganization, at least fifty-one
percent (51%) of the combined voting power of the outstanding voting securities of (i) the corporation resulting from such merger, consolidation or reorganization (the "Surviving Corporation")
or (ii) the immediate parent corporation of the Surviving Corporation; and 

the
individuals who were Incumbent Directors of Bancorp or the Bank at the time of the execution of the agreement providing for such merger, consolidation or reorganization constitute at least
two-thirds (2/3) of the members of the Board of Directors of (i) the Surviving Corporation or (ii) a corporation beneficially owning, directly or indirectly, a
majority of the voting securities of the Surviving Corporation; and 

5

 

no
person other than (i) Bancorp or the Bank, (ii) any employee benefit plan (or any trust forming a part thereof) maintained by Bancorp or the Bank or the Surviving Corporation or any
Subsidiary of Bancorp or the Bank or the Surviving Corporation, or (iii) any person who, immediately prior to such merger, consolidation or reorganization had beneficial ownership of twenty
percent (20%) or more of the then outstanding voting securities of Bancorp or the Bank, has beneficial ownership of twenty percent (20%) or more of the combined voting power of the Surviving
Corporation's voting securities outstanding immediately after such merger, consolidation or reorganization. 

A
merger, consolidation or reorganization involving only the Bank and it Subsidiaries shall be considered a "Non-Control Transaction" regardless of the composition of the Board of
Directors of Bancorp or the Bank immediately following such transaction. 

A
sale or transfer of all or substantially all of the assets of Bancorp or the Bank to one or more of its Subsidiaries shall be considered a "Non-Control Transaction" regardless of whether
such sale or transfer is as a result of liquidation of such entity or otherwise. 

"Notice of Participation" means an individualized written Notice of Participation in this Plan from an authorized Employee of Bancorp. Attached to this
Plan is a form of Notice of Participation; provided that Bancorp may change the form of the Notice of Participation at any time and from time to time. For purposes of this Section, authorized
Employees of Bancorp shall include, but not be limited to, the Designated Agent and any officer of Bancorp designated by the Board of Directors of Bancorp. 

"Participant" means an Employee who meets the eligibility requirements of Section 0 hereof. All references in this Plan to a Participant shall
apply equally to and shall include a former Participant whose benefits under this Plan have accrued prior to the termination of the former Participant's employment. 

"Person" means any person as that term is used for purposes of Section 13(d) or Section 14(d) of the Exchange Act. 

"Plan" means this Management Retention Plan. 

"Retiree Health Plan" means the Key Employee Retiree Health Plan and the Retiree Health Plan (Non-Key Employee) maintained by Bancorp for
the benefit of Bancorp and the Bank and under which Bancorp is obligated to contribute to the payment of the cost of the post-retirement participation by an eligible retired employee and
his or her spouse and dependents in the Group Health Insurance Plan, as that term is defined in the Retiree Health Plan. 

"Service" means the United States Internal Revenue Service. 

"Severance Payment" means the severance compensation and other benefits payable to a Participant under Section 0 hereof. 

"Severance Payment Percentage" means, for each Participant, the Severance Payment Percentage determined as follows: 

	Description of Position
 
	 	Percentage
	 
	Chairman of the Board of Directors of Bancorp or the Bank	 	200	%
	Vice Chairman of the Board of Bancorp or the Bank	 	200	%
	President and CEO of Bancorp or the Bank	 	200	%
	Executive Vice President of Bancorp or the Bank and Leadership Council Member	 	200	%
	Executive Vice President of Bancorp or the Bank and Non-Leadership Council Member	 	150	%
	Grade 18, 19 or T6 of the Bank	 	100	%

6

 

Bancorp
shall specify each Participant's Severance Payment Percentage in his or her Notice of Participation; provided that, if there is any discrepancy between the Severance Payment Percentage set
forth above and that set forth in the Notice of Participation, the Severance Payment Percentage set forth above shall control. If the Severance Payment Percentage applicable to any Participant changes
(whether an increase or decrease) from that specified in the Notice of Participation previously delivered to the Participant as a result of any change in the Participant's employment position, such
change (whether an increase or a decrease) shall be effective as of the date of the change in the employment position and Bancorp shall have no obligation to deliver to the Participant any new or
amended Notice of Participation. 

"Severance Window Period" means the period of thirty-six (36) months immediately following the Change of Control Date. 

"Subsidiary" means any corporation or other entity of which a majority of its voting power, voting equity securities or equity interests is owned,
directly or indirectly, by Bancorp or the Bank. 

Termination of Employment means the termination of a Participant's employment with Bancorp or the Bank, whether such Termination of Employment is as a
result of an Involuntary Termination, a voluntary termination by the Participant or otherwise. Notwithstanding anything in this Plan to the contrary, a Termination of Employment shall not be deemed to
have occurred solely by reason of the transfer of a Participant's employment from Bancorp or the Bank to a Subsidiary unless, in connection with such transfer of employment, one or more of the events
described in Section 0 through 0 above also occurs. 

Eligibility and Participation.  

Eligibility. Only Employees who are employed in any of the following positions are eligible to participate in this Plan: 

Chairman
of the Board of Directors of Bancorp;

Vice Chairman of the Board of Directors of Bancorp or the Bank;

President and CEO of Bancorp or the Bank;

Executive Vice President of Bancorp or the Bank and Leadership Council Member;

Executive Vice President of the Bank and Non- Leadership Council Member; and

Any Employees of the Bank who are employed in positions in any of Grades 18, 19 or T6. 

All
determinations of the eligibility of any Employee to participate in this Plan and whether or not an Employee is performing services in a position described above shall be made by the Board of
Directors of Bancorp, which determination shall be final and conclusive for all purposes. 

Participation. Notwithstanding anything in this Plan to the contrary, an eligible Employee shall become a Participant in this Plan only at such time as
all of the following actions have been taken: (i) the Board of Directors of Bancorp adopts a resolution designating the Employee as a Participant; (ii) Bancorp delivers to the Employee a
written Notice of Participation; and (iii) the Employee executes and returns to Bancorp the Notice of Participation. A Participant shall cease to be a Participant in this Plan immediately upon
his or her Termination of Employment; provided that, if the Participant is or becomes entitled to any Severance Payment or other payments under this Plan as a result of such Termination of Employment,
the Participant shall remain a Participant in this Plan until the full amount of such Severance Payment or other payments has been paid to the Participant. 

Right to Benefits. Subject to the terms of this Plan, this Plan and the Notice of Participation establish and vest in each Participant a contractual
right to the benefits to which the Participant is entitled pursuant to the terms thereof, enforceable by the Participant against Bancorp or the Bank as provided in this Plan; provided that, prior to
the occurrence of a Change of Control Date, no Participant or class 

7

 

of
Participants shall have any right to receive the payment of any benefits under or by reason of this Plan. 

Termination of Eligibility. Prior to the occurrence of a Change of Control Date, a Participant's participation in this Plan and right to receive any
Severance Payment or other benefit under this Plan as a result of the occurrence of a Change of Control Date automatically shall terminate on the date on which the Participant ceases to be employed in
an eligible position described in Section 0 above, regardless of whether the change in position resulted from a change in the Participant's employment position, the amendment of this Plan to
change the eligible employment positions, a Termination of Employment or otherwise. 

Severance Benefits.  

Right To Severance Benefits.  

Termination Following a Change of Control. If a Participant's Termination of Employment with Bancorp or the Bank occurs at any time within the Severance
Window Period, then, subject to Section 0 hereof, the Participant shall be entitled to receive the following severance benefits. 

Involuntary Termination Following A Change Of Control. If the Termination of Employment is as a result of an Involuntary Termination other than for
Cause or the Participant's death or Disability, then the Participant shall be entitled to receive a Severance Payment equal to the product obtained by multiplying the Participant's Severance Payment
Percentage times the Participant's Average Annual Compensation. 

30-Day Window. If the Termination of Employment is as a result of Participant's voluntary termination of his or her employment at any time
during the thirty (30) day period beginning on the first (1st) anniversary of the Change of Control Date and such voluntary termination does not breach or conflict with any of the Participant's
obligations under a written employment agreement between the Participant and Bancorp or the Bank, as appropriate, or its successor, then the Participant shall be entitled to receive a Severance
Payment equal to the product obtained by multiplying the Participant's Severance Payment Percentage times the Participant's Average Annual Compensation. 

Voluntary Resignation; Termination For Cause. If the Termination of Employment is (i) by reason of the Participant's voluntary resignation other
than during the period described in paragraph B, above, and such Termination of Employment is not an Involuntary Termination, or (ii) for Cause, then (x) the Participant shall not
be entitled to receive any benefits under this Plan and (y) the Participant shall be entitled to receive only such severance or other benefits (if any) as may then be provided under Bancorp's
or the Bank's, as appropriate, then existing severance and benefits plans and policies other than under this Plan. 

Disability; Death. If the Termination of Employment is as a result of the Participant's Disability or death, then (i) the Participant shall not
be entitled to receive any benefits under this Plan and (ii) the Participant shall be entitled to receive only such severance or other benefits (if any) as may then be provided under Bancorp's
or the Bank's, as appropriate, then existing severance and benefits plans and policies other than this Plan. 

Continuation of Employee Benefits.  

COBRA Benefits. If (i) the Participant's employment is terminated at any time during the Severance Window Period and the Participant is entitled
to receive a Severance Payment by reason of such Termination of Employment, (ii) the Participant is not eligible to participate in any Retiree Health Plan, and (iii) the Participant
timely exercises his or her rights under Title X of the Consolidated Budget Reconciliation Act of 1985 (COBRA") to continue to participate in Bancorp's or the Bank's, as appropriate, group health and
dental plans after such Termination of Employment, then Bancorp or the 

8

 

Bank,
as appropriate, shall pay all premiums and costs associated with the participation by the Participant and his or her spouse and dependents in such health and dental plans for the period
beginning as of the date of the Termination of Employment and ending on the earlier of (x) the date that the Participant and his or her spouse and dependents become covered under another
employer's health and/or dental insurance plans and (y) the last day of the period during which the Participant and/or his or her spouse and dependents are eligible to participate in Bancorp's
or the Bank's, as appropriate, health and dental plans under COBRA. 

Retiree Health Plan Benefits. If the Participant is eligible to participate in any Retiree Health Plan, the Company shall have no obligation to make any
payment to or on behalf of the Participant or any of his or her spouse and dependents under this Section with respect to their participation in such Retiree Health Plan. 

Termination Apart From Change Of Control. In the event that a Participant's 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, then (i) the Participant shall not be entitled to receive any benefits under
this Plan by reason of the occurrence of such Change of Control Date and (ii) the Participant shall be entitled to receive only such severance benefits as may then be provided under the then
existing severance and benefit plans and policies, other than this Plan, of Bancorp or the Bank, as appropriate. 

Limitation on Benefits. By executing and returning to Bancorp a Notice of Participation, a Participant shall be deemed to acknowledge that the benefits,
if any, payable to the Participant under this Plan as a result of an Involuntary Termination following a Change of Control are the only compensation to which the Participant is entitled as a result of
such Involuntary Termination and that the Participant shall have no right to bring or maintain, and shall not bring or maintain, any suit, action or other proceeding seeking compensation or damages
based on any alleged wrongful termination of his or her employment with Bancorp or the Bank, as appropriate. 

Payment Of Severance Payment. Any Severance Payment which a Participant is entitled to receive under this Plan shall be paid by Bancorp or the Bank, as
appropriate, of as of the date of the Termination of Employment. 

Timing Of Severance Payment. Any Severance Payment which a Participant is entitled to receive under this Plan shall be paid by Bancorp or the Bank, as
appropriate, in a lump sum by the later of (i), if no Dispute is made with respect to the Determination, as those terms are used in Section 0 hereof, fifteen (15) business days after the
date of the delivery of the Determination, and (ii), if a Dispute is made with respect to the Determination, fifteen (15) business days after the date of the resolution of such Dispute. 

Retiree Health Plan. The rights and benefits of a Participant under this Plan are in addition to and not in lieu of any rights of the Participant under
any Retiree Health Plan. Nothing in this Plan shall limit the rights of any Participant under any Retiree Health Plan and nothing in any Retiree Health Plan shall limit the rights of any Participant
under this Plan. 

Excise Tax and Non-Deductibility Limitations.  

Gross-Up Payment. If it is determined that the payments and benefits payable to any Participant under this Plan, when aggregated with any
other payments or benefits received or to be received by a Participant by reason of the occurrence of the Change of Control (collectively, the "Payments"), would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any interest or penalties thereon, is herein referred to as an "Excise
Tax"), then such Participant shall be entitled to an additional payment (a "Gross-Up Payment") in an amount that will place such Participant in the same after-tax economic 

9

 

position
that such employee would have enjoyed if the Excise Tax had not applied to the Payments. The amount of the Gross-Up Payment shall be determined by the Accountants. No
Gross-Up Payments shall be payable to a Participant hereunder if the Accountants determine that the Payments to such Participant are not subject to an Excise Tax. 

Determination.  

Initial Determination. An initial determination as to whether any Payments would be subject to the Excise Tax shall be made at Bancorp's expense by an
accounting firm selected by Bancorp (which firm may be Bancorp's regular outside auditors) (the "Accountants"). The Accountants shall provide their determination (the "Determination"), together with
supporting calculations and documentation, to Bancorp, the Bank and the Participant within thirty (30) days after the date of the Participant's Termination of Employment. For purposes of making
the calculations required by this Section 0, 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. Bancorp, the Bank and the Participant shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this Section 0. Bancorp shall bear all costs the Accountants may reasonably incur in connection with any calculations
contemplated by this Section 0. If the Accountants determine that no Excise Tax is payable by a Participant, Bancorp shall cause the Accountants to provide such 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 Bancorp or the Bank, as appropriate, shall have the right to dispute the Determination (the "Dispute"). The Participant,
Bancorp or the Bank shall initiate the Dispute, if at
all, by delivering to Bancorp written notice of the Dispute within ten (10) days after the delivery of the Determination by the Accountants. If a written notice of Dispute is not delivered to
Bancorp 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 all of the Participant,
Bancorp and the Bank. If Bancorp or the Bank initiate the Dispute, they shall promptly deliver to the Participant a copy of the written notice delivered to Bancorp; provided that they shall have no
obligation to deliver such notice to Participant within any particular time period. Bancorp 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. 

Reporting. Bancorp, the Bank and the Participant each shall report the Severance Payment and other Payments received, or to be received, by the
Participant as a result of the occurrence of a Change of Control in accordance with the Determination, as finally adjusted as a result of any Dispute. 

Payment of Gross-Up. Bancorp or the Bank, as appropriate, shall pay the Gross-Up Payment to the Participant within fifteen
(15) days after the date on which the Accountants deliver written notice of the Determination under Section 0 above. If it is subsequently determined, whether by reason of a Dispute, an
audit by the Service, or otherwise, that the Gross-Up Payment initially paid by Bancorp or the Bank is incorrect, then, subject to the provisions of Section 0 below, within fifteen
(15) days after the date of such subsequent determination, either (i) Bancorp or the Bank, as appropriate, shall pay to Participant any additional Gross-Up Payment determined
to be payable or (ii) the Participant shall pay to Bancorp or the Bank, as appropriate, the excess amount of the Gross-Up Payment previously paid by Bancorp or the Bank. 

Procedures. Each Participant shall notify Bancorp in writing of any claim by the Service that, if successful, would require the payment by Bancorp or
the Bank of a Gross-Up Payment or an additional Gross-Up Payment to such Participant. Such notice shall be given as soon as practicable after the Participant knows of such
claim and shall apprise Bancorp of the nature of the claim and the date on 

10

 

which
the claim is requested to be paid. A Participant shall not pay the claim until the expiration of thirty (30) days following the date on which the Participant notifies Bancorp of the claim
or such shorter period ending on the date the taxes with respect to such claim are due (the "Notice Period"). If Bancorp or the Bank notifies the Participant in writing prior to the expiration of the
Notice Period that it desires to contest the claim, the Participant shall: (i) give Bancorp or the Bank, as appropriate, any information reasonably requested by Bancorp or the Bank relating to
the claim; (ii) take such action in connection with the claim as Bancorp or the Bank reasonably requests, including, without limitation, accepting legal representation with respect to such
claim by counsel selected by Bancorp or the Bank and reasonably acceptable to the Participant; (iii) cooperate with Bancorp or the Bank in good faith in contesting the claim; and
(iv) permit Bancorp or the Bank to participate in any proceedings relating to the claim. A Participant shall permit Bancorp or the Bank to control all proceedings related to the claim and to
pursue or forgo any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim. If requested by Bancorp or the Bank, a Participant shall
agree either to pay the tax claimed and sue for a refund or to contest the claim in any permissible manner and to prosecute such contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts as Bancorp or the Bank shall determine; provided that, if Bancorp or the Bank directs the Participant to pay such claim and pursue a
refund, Bancorp or the Bank shall advance the amount of such payment to the Participant on an after-tax and interest-free basis (the "Advance"). The control of the contest
related to the claim by Bancorp or the Bank shall be limited to the issues related to the Gross-Up Payment and the Participant shall be entitled to settle or contest, as the case may be,
any other issues raised by the Service or other taxing authority. If neither Bancorp nor the Bank notifies the Participant in writing prior to the end of the Notice Period of its desire to contest the
claim, Bancorp or the Bank, as appropriate, shall pay to the Participant an additional Gross-Up Payment in respect of the excess parachute payments that are the subject of the claim, and
the Participant shall be required to pay the amount of the Excise Tax that is the subject of the claim to the applicable taxing authority in accordance with applicable law. Bancorp or the Bank, as
appropriate, shall pay any additional Gross-Up Payment to the Participant within thirty (30) days after the later of (i) the expiration of the Notice Period and
(ii) the final determination in any contest initiated by Bancorp, the Bank or the Participant with respect to the claim. 

Repayments. If, after receipt by a Participant of any Gross-Up Payment, any additional Gross-Up Payment, or any Advance, the
Participant becomes entitled to a refund with respect to such payments or any claim to which any such payments relate, the Participant shall pay Bancorp or the Bank, as appropriate, the amount of the
refund (together with any interest paid or credited thereon). The Participant shall pay any amount payable to Bancorp or the Bank under this Section within thirty (30) days after the
determination of the amount of the refund payable to the Participant. If, after receipt by Participant of an Advance, a determination is made that the Participant shall not be entitled to any refund
with respect to the claim and neither Bancorp nor the Bank promptly notifies the Participant of its intent to contest the denial of refund, then the amount of the Advance shall not be required to be
repaid by Participant and the amount thereof shall offset the amount of the additional Gross-Up Payment then owing to the Participant. 

Further Assurances. Bancorp or the Bank, as appropriate, shall indemnify and hold harmless each Participant, on an after-tax basis, from any
costs, expenses, penalties, fines, interest or other liabilities ("Losses") incurred by the Participant with respect to the exercise by Bancorp or the Bank of any of its rights under Section 0,
including, without limitation, any Losses related to Bancorp's or the Bank's decision to contest a claim or any imputed income to the Participant resulting from any Advance or action taken on the
Participant's behalf by Bancorp or the Bank hereunder. Bancorp or the Bank, as appropriate, shall pay all legal fees and expenses incurred in connection with the contest of any claim under
Section 0, and shall promptly reimburse each Participant for the reasonable expenses incurred by the Participant in connection with any actions taken by Bancorp or the Bank or required to be
taken by the Participant in connection with such contest. 

11

 

Employment Status; Withholding.  

Employment Status. This Plan does not constitute a contract of employment or impose on (i) Bancorp or the Bank any obligation to
(x) retain the Participant as an Employee, (y) change, or refrain from changing, the status of the Participant's employment, or (z) change, or refrain from changing, Bancorp's or
the Bank's policies regarding termination of employment, or (ii) the Participant any obligation to continue his or her employment with Bancorp or the Bank for any time or any particular period
of time. Subject to the provisions of any written employment agreement between Bancorp or the Bank and the Participant, the Participant's employment is and shall continue to be at-will, as
defined under applicable law. Except as specifically provided in the last sentence of Section 0 hereof, if the Participant's employment with Bancorp or the Bank terminates for any reason at any
time other than during the Severance Window Period, including (without limitation) any termination prior to a Change of Control Date, the Participant shall not be entitled to any payments, benefits,
damages, awards or other compensation under this Plan, and shall be entitled only to such payments, benefits, damages, awards and other compensation as shall be available in accordance with Bancorp's
or the Bank's established employee plans and practices or other agreements with Bancorp or the Bank at the time of termination. 

Transfer of Employment. Notwithstanding anything in this Plan to the contrary, the reassignment of a Participant's employment from Bancorp or the Bank
to any Subsidiary, shall not, by itself, be considered a Termination of Employment. 

Taxation
of Plan Payments. All amounts paid by Bancorp or the Bank to a Participant pursuant to this Plan shall be subject to all applicable federal, state and local payroll and withholding taxes,
including, but not limited to, any withholding obligations with respect to the Section 4999 excise tax. 

Successors.  

Company's Successors. Bancorp shall require any successor to Bancorp or the Bank (whether directly or indirectly and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) or to all or substantially all of Bancorp's or the Bank's business and/or assets to assume this Plan and expressly agree to perform all of the obligations of
Bancorp and the Bank under this Plan. For all purposes under this Plan, references to Bancorp or the Bank shall include any successor to Bancorp or the Bank and its business and/or assets, as
appropriate. Any corporation, partnership, limited liability company or other person or entity which is the successor of Bancorp or the Bank (whether directly or indirectly and whether by purchase,
lease, merger, consolidation, liquidation or otherwise) or successor to all or substantially all of the business and/or assets of Bancorp or the Bank (including, but not limited to, the stock of any
subsidiary of Bancorp) shall be deemed to have assumed all of Bancorp's or the Bank's, as appropriate, obligations under this Plan regardless of whether or not such successor specifically acknowledges
in writing that it is assuming all of such obligations under this Plan. 

Failure to Obtain Assumption. The failure of Bancorp to obtain the assumption of this Plan by Bancorp's or the Bank's successor prior to the
effectiveness of any such succession will be deemed to be the Involuntary Termination of the Participants in this Plan. The Involuntary Termination of each effected Participant shall be effective as
of the day before the effective date of such succession and will entitle each effected Participant to receive the same Severance Payment and other benefits under this Plan that such Participant would
have been entitled to receive had such Participant's employment been terminated in an Involuntary Termination after the effective date of such succession and after the occurrence of a Change of
Control. 

Successor Fund. Notwithstanding anything in this Plan to the contrary, if a transaction occurs in which any person or entity would be deemed to be a
successor to Bancorp or the Bank and the successor does not specifically assume all of Bancorp's or the Bank's obligations under this Plan as contemplated in Section 0 above, Bancorp
(i) shall retain or shall cause to be set aside from either Bancorp's or the 

12

 

Bank's
assets or the consideration payable to Bancorp or the Bank in such transaction an amount sufficient to pay, based on the compensation levels of the Participants who are Employees of Bancorp and
the Bank as of the date immediately preceding the close of such transaction, all of the Severance Payments and other benefits that are then payable and within two (2) years from the closing
date may be payable under this Plan to such Participants and (ii) promptly after the close of such transaction shall use such assets and/or consideration to pay the Severance Payments and other
benefits payable to such Participants under this Plan. 

Participant's Successors. All rights of each Participant hereunder shall inure to the benefit of, and be enforceable by, the Participant's personal or
legal representatives, executors, administrators, successors, heirs, distributes, devisees and legatees. 

Term and Termination.  

Term. The term of this Plan shall begin as of the Effective Date, and, unless terminated sooner, shall continue to and including the earliest of the
dates determined under this Section, whichever is applicable: 

if
a Change of Control has not occurred prior to the occurrence of the earlier of the dates described in this clause 0, the earlier of (i) December 31, 2007 and (ii) the
effective date of the termination of this Plan by the Board of Directors of Bancorp pursuant to Section 0 hereof; 

if
a Change of Control has occurred prior to the occurrence of the earlier of the dates described in this clause 0, the earlier of (i) the date on which Bancorp or the Bank have paid and
satisfied all of their obligations under this Plan and (ii) three (3) years after the Change of Control Date with respect to any Change of Control; and 

if,
prior to the occurrence of the earlier of the dates described in this clause 0, a transaction shall have occurred by reason of which another person or entity is deemed under
Section 0 above to be the successor to Bancorp or the Bank and the successor person or entity has not assumed and agreed in writing to perform all of the obligations of Bancorp or the Bank, as
appropriate, under this Plan, the earlier of (i) the date on which Bancorp and the Bank have paid and satisfied all of their obligations under this Plan and (ii) three (3) years
after the effective date of such succession transaction. 

A
termination of this Plan pursuant to this Section shall be effective for all purposes, except that such termination shall not affect or limit the obligation of Bancorp or the Bank, as appropriate,
to pay and/or make provision for the payment of the Severance Payment and other benefits earned by or payable to a Participant prior to the termination of this Plan. 

Termination.  

Prior to Change of Control. Prior to the occurrence of a Change of Control Date or the effective date (the "Succession Date") of a transaction by reason
of which another person or entity is deemed under Section 0 above to be Bancorp's or the Bank's, successor, the Board of Directors of Bancorp shall have authority to terminate this Plan with
respect to any or all of Bancorp and the Bank by resolution adopted by three-fourths (3/4ths) of the Incumbent Directors. 

After Change of Control. On and after any Change of Control Date or Succession Date, this Plan may not be terminated by the Board of Directors of
Bancorp with respect to whichever of Bancorp or the Bank the Change of Control Date or Succession Date occurred, prior to the satisfaction by Bancorp and the Bank of all of its obligations to the
Participants under this Plan arising from or relating to the occurrence of such Change of Control Date or Succession Date. For the purposes of this Section, no Change of Control Date shall be deemed
to have occurred if (i) the Contemplated Change of Control is abandoned or does not occur, (ii) the Board of Directors of Bancorp or the Bank, as appropriate, adopts a resolution
described in Section 0 hereof, which establishes a Reset Date, and (iii) the 

13

 

Contemplated
Change of Control does not subsequently occur within three (3) months of the Reset Date. 

Amendment.  

Prior to Change of Control. Prior to the occurrence of a Change of Control Date or a Succession Date, the Board of Directors of Bancorp shall have
authority to amend this Plan in any respect by resolution adopted by three-fourths (3/4ths) of the Incumbent Directors. The types of amendments of this Plan which the Board of Directors may adopt
under the preceding sentence include, but are not limited to, (i) the removal or addition of any Participants or class of Participants entitled to benefits under this Plan, (ii) the
removal or addition of any Employees or class of Employees eligible to participate in this Plan, (iii) the increase or decrease of the Severance Payment Percentage for any Participants or class
of Participants and (d) the extension or reduction of the length of the Severance Window Period. 

After Change of Control. On and after any Change of Control Date or Succession Date, this Plan may not be amended by the Board of Directors of Bancorp
prior to the satisfaction by whichever of Bancorp or the Bank the Change of Control Date or Succession Date occurred, of all of their obligations to the Participants under this Plan arising from or
relating to the occurrence of such Change of Control Date or Succession Date; provided that, not withstanding the foregoing after such Change of Control Date or Succession Date, the Board of Directors
of Bancorp may amend this Plan to effect administrative changes that do not reduce the amount of any Severance Payments or other benefits payable to any Participant as a result of the occurrence of
such Change of Control Date or Succession Date. For purposes of this Section, no Change of Control Date with respect to Bancorp or the Bank shall be deemed to have occurred if (i) the
Contemplated Change of Control, as that term is
defined in Section 0 hereof, is abandoned or does not occur, (ii) the Board of Directors of Bancorp or the Bank adopts a resolution described in Section 0 hereof, which
establishes a Reset Date, and (iii) the Contemplated Change of Control does not subsequently occur within three (3) months of the Reset Date. 

Plan Administration.  

Appeal Procedure. A Participant who disagrees with the Severance Payment or other benefits payable to the Participant under this Plan may file a
written appeal with the Designated Agent. Any claim relating to this Plan shall be subject to the appeal process set forth in this Section. 

Notice of Appeal. The Participant must file, if at all, a written notice of appeal within the following periods: (a), if the appeal relates to the
Severance Payment, within sixty (60) days of the date of the Participant's Termination of Employment; and (b), if the appeal relates to any other payment or benefit under this Plan, within
sixty (60) days after the earlier of the date of the determination of the amount of such benefit or the payment of such benefit to the Participant.. The appeal must state the reasons why the
Participant believes that he or she is entitled to a different or additional Severance Payment and/or other benefits under this Plan. The Designated Agent shall review the claim. If the claim is
wholly or partially denied, the Designated Agent shall provide the Participant and Bancorp or the Bank, as appropriate, a written notice of the denial, specifying the reasons the claim was denied. The
Designated Agent shall deliver to the Participant and Bancorp or the Bank, as appropriate, written notice of the Designated Agent's determination with respect to the appeal within ninety
(90) days after the delivery of the notice of appeal. 

Further Appeal on Denial of Claim. If the claim is denied, in whole or in part, the Participant may request a review of the denial at any time within
ninety (90) days following the date the Participant received written notice of the denial of his or her claim. If the claim is accepted, in whole or in part, neither Bancorp nor the Bank shall
have any right to request a review of the acceptance. 

14

 

Information to Participant. The Designated Agent shall afford the Participant a full and fair review of the decision denying the claim and, if requested
by the Participant, shall: 

Permit
the Participant Bancorp and the Bank to review any documents that are pertinent to the claim; 

Permit
the Participant Bancorp and the Bank to submit to the Designated Agent issues and comments in writing; and 

The
decision on review by the Designated Agent shall be in writing and shall be issued within sixty (60) days following receipt of the request for review of the decision. 

The
decision on review shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision of the Designated Agent is based. 

Sole Remedy. If the appeal of a Participant is denied, or if the outcome of said appeal is unsatisfactory to the Participant, the Participant's sole
remedy shall be to commence an arbitration proceeding in accordance with the provisions of Section 0, below. 

Arbitration. Any dispute or controversy arising under or in connection with this Plan shall be settled by arbitration in accordance with the rules of
the American Arbitration Association then in effect, conducted before a panel of three (3) arbitrators sitting in a location selected by the Participant within fifty (50) miles from the
location of the Participant's principal place of employment. Both Bancorp and the Bank shall be joined as parties to any arbitration. This agreement to arbitrate shall be specifically enforceable. At
the time of the commencement of any arbitration, the parties to the arbitration shall use their best efforts to establish reasonable discovery and other procedures for the conduct of such arbitration.
In consideration for the Participant's waiver of his or her right to litigate any such dispute or controversy in a court of law, and notwithstanding any contrary provisions of California law regarding
allocation of attorney fees, costs and expenses in arbitration proceedings, Bancorp agrees to pay, on a monthly basis, the reasonable attorney fees, costs and expenses (with such reasonableness
determined by the arbitrator) incurred in good faith by the Participant in connection with any such arbitration regardless of the outcome of the arbitration. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. If the Participant is the prevailing party or recovers any damages in such arbitration, he or she shall be entitled to receive, in addition
thereto, pre-judgment and post-judgment interest. Punitive damages shall not be awarded. The arbitration proceedings shall be conducted in confidence and each party to the
arbitration shall agree not to disclose the existence or results of the proceeding or any other matter relating to the proceeding except to the limited extent necessary to judicially enforce any
award. 

Action by Representative. For purposes of the appeal and arbitration procedures set forth in this Section, any action required or authorized to be taken
by the Participant may be taken by a representative authorized in writing by the Participant to represent him or her. 

Rules for Determining Annual Compensation. The following provisions shall apply to the determination of a Participant's annual cash salary and cash
bonuses and commissions and Average Annual Compensation. 

Cash Bonuses. The amount of the cash bonuses payable by Bancorp or the Bank with respect to any Fiscal Year is determined after the close of such Fiscal
Year and normally is paid during the first quarter of the following Fiscal Year. The amount of the cash bonuses payable to any Participant with respect to any Fiscal Year shall be the amount, if any,
determined after the close of such Fiscal Year and which is paid during the following Fiscal Year. 

Cash Commissions. If the amount of any cash commissions payable by Bancorp or the Bank with respect to any Fiscal Year is determined and paid after the
close of such Fiscal Year, the amount of the cash commissions payable to any Participant with respect to any Fiscal Year shall be the amount, if any, determined after the close of such Fiscal Year and
which is paid during the following Fiscal Year. 

15

 

No Fringe Benefits. A Participant's annual cash salary and cash bonuses and commissions for any Fiscal Year shall not include any income or benefit
realized by the Participant with respect to any fringe benefits provided by Bancorp or the Bank, including, without limitation, contributions to Bancorp'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. For purposes of this Section,
the eligibility for or payment of cash bonuses and commissions shall not to be considered a fringe benefit. 

No Stock Options. A Participant's annual cash salary and cash bonuses and commissions for any Fiscal Year shall not include any income or gain realized
by the Participant with respect to any stock options or other securities or rights granted to the Participant by Bancorp or the Bank under any stock option plan or other incentive plan in effect at
any time. 

Notices.  

General. All notices and other communications contemplated by this Plan shall be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Participant, mailed notices shall be addressed to him or her at the home
address which he or she most recently communicated to Bancorp or the Bank in writing for purposes of his or her employment. In the case of Bancorp or the Bank, mailed notices shall be addressed to
Bancorp's corporate headquarters, and all notices shall be directed to the attention of the Designated Agent. 

Notice of Termination of Employment. If a Participant's employment is terminated at any time during the Severance Window Period following a Change of
Control Date, Bancorp shall deliver to the Participant written notice stating whether or not such termination is an Involuntary Termination for purposes of this Plan. Notwithstanding anything to the
contrary in this Plan, any Notice of Participation, or any employment agreement between the Participant and Bancorp or the Bank, the delay or failure of Bancorp to deliver any notice under this
Section shall neither (i) limit the right of Bancorp or the Bank to terminate the Participant's employment or (ii) be considered the breach by Bancorp or the Bank of any of its
obligations under this Plan. Notwithstanding anything in this Plan or any notice delivered to the Participant under this Plan, if the Participant is an employee of the Bank, neither Bancorp's or the
Designated Agent's delivery of any notice to the Participant nor the taking of any other action, by either of them under this Plan shall constitute or cause Bancorp to be participating in or liable
for any action taken by the Bank with respect to the Participant's employment. 

Notice by the Participant of Involuntary Termination. In the event that the Participant determines that an Involuntary Termination has occurred at any
time during a Severance Window Period following a Change of Control, the Participant shall deliver to Bancorp (within ninety (90) days after the date on which such Involuntary Termination
occurred) written notice that such Involuntary Termination has occurred. Such notice shall identify the specific provision or provisions in this Plan upon which the Participant relied to make such
determination and shall set forth the facts and circumstances claimed to provide a basis for such determination. The failure by the Participant to include in the notice any fact or circumstance which
contributes to a showing of Involuntary Termination shall not waive any right of the Participant hereunder or preclude the Participant from asserting such fact or circumstance in enforcing his or her
rights hereunder. 

Miscellaneous Provisions.  

Determination of Voting Power. For purposes of determining the ownership of voting power "immediately after" any event or as of any date, (i) the
determination shall be made (x), if the determination is made in connection with the occurrence of any event, as of the close of business on the first calendar day after the closing of the event and
(y), if the determination is made as of a date 

16

 

other
than in connection with the occurrence of an event, as of the close of business on the applicable date, and (ii) the determination shall consider the effect of the issuance of all
securities to be issued upon the closing of the event and all transactions related to the occurrence of such event. 

No Duty to Mitigate. The Participant shall not be required to mitigate the amount of any payment contemplated by this Plan, nor shall any such payment
be reduced by any earnings that the Participant may receive from any other source. 

Severability. The invalidity or unenforceability of any provision or provisions of this Plan shall not affect the validity or enforceability of any
other provision hereof, which shall remain in full force and effect. 

Tax Withholding. All payments made pursuant to this Plan will be subject to the income, employment and excise tax withholding obligations of all
applicable federal, state and local laws. 

Assignment.  

No Assignment by Participant. A Participant may not assign any or all of his or her rights or benefits under this Plan. The rights of any Participant to
receive any Severance Payment or other benefits under this Plan shall not be made subject to any option or assignment, whether voluntarily, involuntarily, by operation of law or otherwise, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's process. Any purported assignment or option with respect to any rights or benefits of any Participant or the payment of any
Severance Payment or other benefit in violation of this Section shall be void. 

Assignment by Bancorp. Bancorp or the Bank may assign any or all of its rights and may delegate all or any portion of its obligations under this Plan to
any affiliate of Bancorp or the Bank; provided that no such assignment shall be made (i) if the net worth of the assignee is less than the net worth of Bancorp or the Bank, as appropriate, at
the time of assignment and (ii) unless Bancorp or the Bank, as appropriate, guarantees the assignee's timely performance of all obligations and payment of all Severance Payments and other
benefits then or thereafter payable under this Plan. Notwithstanding anything in this Plan to the contrary, without the effected Participant(s)'s prior written consent, which consent may be withheld
for any reason, after the occurrence of a Change of Control Date or a Succession Date neither Bancorp nor the Bank may assign all or any portion of its obligations under this Plan. 

Limitation. All Severance Payments and other benefits and payments payable to a Participant this Plan shall be paid by and be the obligation of
whichever of Bancorp or the Bank is or was the employer of the Participant at the time of the Termination of Employment. In no event shall whichever of Bancorp or the Bank is not the employer of the
Participant at the time of the Termination of Employment have any obligation to pay any Severance Payment or other benefit or payment payable to the Participant under this Plan and which is not paid
by whichever of Bancorp or the Bank was the employer of the Participant at the time of the Termination of Employment. 

ERISA Required Information.  

Plan Sponsor. 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 

17

 

Designated Agent. Designated Agent for service of process: 

General
Counsel

Pacific Capital Bancorp

1021 Anacapa Street

Santa Barbara, California 93101

(805) 564-6310 

Bancorp
may change the name and position of the Designated Agent at any time and from time to time; provided that no such change shall be effective with respect to any particular Participant until
Bancorp has delivered notice of such change to such Participant. 

Plan Records. Plan records are kept on a Fiscal Year basis. 

Plan Funding. This Plan, and the payment of any Severance Payments and other benefits under this Plan, shall be funded from general assets of whichever
of Bancorp or the Bank is obligated to make the payment. Except as otherwise specifically provided in this Plan, neither Bancorp nor the Bank shall not have any obligation to set aside, segregate or
place in any escrow or any other fund, any assets for
purposes of providing any Severance Payments or other benefits that here or hereafter might be payable to any Participant under this Plan. 

18

 

PACIFIC CAPITAL BANCORP

MANAGEMENT RETENTION PLAN  

NOTICE OF PARTICIPATION  

TO:
                                         
                          
 

DATE:
                                         
                  

Designation. The Board of Directors of Pacific Capital Bancorp ("Bancorp") has designated you as a Participant in the Pacific Capital Bancorp Management
Retention Plan (the "Plan"), a copy of which is attached hereto. The terms and conditions of your participation in the Plan are as set forth in the Plan and herein. Your Severance Payment Percentage
is as follows: 

SEVERANCE
PAYMENT PERCENTAGE =                              % 

The
undersigned acknowledges that (i his or her Severance Payment Percentage set forth above may change as a result of a change in the undersigned's employment position or the employment positions
eligible to participate in the Plan and (ii) any such change shall be effective regardless of whether or not the Board of Directors of Bancorp notifies the undersigned of such change. 

Continuation. Prior to the occurrence of a Change of Control Date, your participation in the Plan automatically shall terminate on the date on which you
cease to be employed in an eligible position described in Section 0 of the Plan. 

Return of Notice. If you agree to participate in the Plan on these terms and conditions, please acknowledge your acceptance by signing below. Please
return the signed copy of this Notice of Participation within ten (10) days of the date set forth above to: 

Assistant
Corporate Secretary

Pacific Capital Bancorp

1021 Anacapa Street

Santa Barbara, California 93101

(805) 564-6298 

Your
failure to timely remit this signed Notice of Participation will result in your removal from the Plan. 

Waiver of Employment Claims. By executing and returning this Notice of Participation, you agree that the benefits, if any, payable to you under this
Plan as a result of an Involuntary Termination of your employment with Bancorp or any of its Subsidiaries following a Change of Control are the only compensation to which you are entitled as a result
of such Involuntary Termination and that you will not bring or maintain any suit, action or other proceeding seeking compensation or damages and alleging the wrongful termination of your employment,
any discriminatory employment practices or other claim based on improper employment practices by Bancorp or any of its Subsidiaries. 

Designation of Beneficiary. The undersigned hereby directs that, if the undersigned should die prior to the payment to the undersigned of any Severance
Payment payable to the undersigned under this Plan, such Severance Payment shall be paid to the following person and that each of Bancorp and the Bank may rely on this designation for all purposes and
shall have no obligation to independently determine the propriety of this designation. 

Beneficiary:
                                         
                                          
             
 

Relationship
to Participant:
                                         
                                     

Your
failure to timely remit this signed Notice of Participation will result in your removal from the Plan. Please retain a copy of this Notice of Participation, along with the Plan, for your records. 

19

QuickLinks

Exhibit 10.1.1

PACIFIC CAPITAL BANCORP MANAGEMENT RETENTION PLAN as amended effective February 27, 2003

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