Pacific Capital Bancorp Amended & Restated Retiree Health Plan Non Key Employee

Exhibit 10.1.6


PACIFIC CAPITAL BANCORP


1998 AMENDED AND RESTATED RETIREE HEALTH PLAN


(Non-Key Employees)

December 30, 1998

1998 AMENDED AND RESTATED RETIREE HEALTH PLAN (Non-Key Employees)

THIS 1998 AMENDED AND RESTATED RETIREE HEALTH PLAN is adopted by PACIFIC CAPITAL BANCORP, a California corporation (" Bancorp" ), with reference to the following facts:


RECITALS:


A. Santa Barbara Bank and Trust, a California corporation (" SBBT" ), is a wholly owned subsidiary corporation of Bancorp.


B. SBBT originally adopted this Plan effective December 29, 1992, in order to provide health and dental insurance to retired employees of SBBT, and later amended this Plan pursuant to (i) that certain First Amendment dated effective January 1, 1996 (the " First Amendment" ), and (ii) that certain Second Amendment dated effective January 1, 1997 (the " Second Amendment" ).


C. In a merger transaction (the " Merger Transaction" ) that closed effective December 30, 1998, (i) Pacific Capital Bancorp, a California corporation (" Target" ), was merged with and into Bancorp, and (ii) Bancorp changed its name to " Pacific Capital Bancorp," and as a result of that transaction and name change Bancorp now owns all the outstanding capital stock of not only SBBT but also other corporations.


D. Bancorp desires to adopt this Plan in order to (i) adopt this Plan for the benefit of all eligible employees of Bancorp and all of its wholly owned subsidiary corporations, (ii) incorporate the terms of the First Amendment and the Second Amendment, and (iii) reflect the Merger Transaction.


PLAN:


NOW, THEREFORE, the Bancorp, intending to be legally bound, hereby adopts the following Plan.

1. DEFINITIONS

For purposes of this Plan, each of the following terms shall have the meaning set forth below:

1.1 " Affiliate" means each corporation in which Bancorp now or hereafter owns (directly or indirectly through ownership of any subsidiary corporation) all the outstanding capital stock.

1.2 " Bancorp" means PACIFIC CAPITAL BANCORP, a California corporation formerly known as " SANTA BARBARA BANCORP ."


1.3 " Cause" means (a) 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, (b) the Participant' s conviction of a felony, (c) a willful act by the Participant which constitutes gross misconduct and which is injurious to any of the Retention Companies, or (d) 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 the Retention Company' s belief that the Participant has not substantially performed his or her duties. Notwithstanding the foregoing or anything in this Plan to the contrary:

1.3.1 Cause shall not be deemed to exist under clause (c) or (d) of this Section unless and until (i) 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 (ii) the Participant shall have been provided an opportunity to be heard by the Board (with the assistance of the Participant' s counsel if the Participant so desires); and


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1.3.2 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 the Retention Company.


1.4 " Change of Control" means:


1.4.1 The occurrence of any of the following events:

A. An acquisition (other than directly from the Retention Company) of any voting securities of the Retention Company 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 thirty-five percent (35%) or more of the combined voting power of the Retention Company' 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;

B. A cumulative change in the composition of the Board of Directors of the Retention Company occurring during any two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors; provided that no individual shall be considered an Incumbent Director if such individual initially assumed office as a result of either an actual or threatened Election Contest (as described in Rule 14a-11 promulgated under the Exchange Act) (an " Election Contest" ) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors of the Retention Company (a " Proxy Contest" ) including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

C. Approval by the shareholders of the Retention Company of:

(1) A merger, consolidation or reorganization involving the Retention Company, unless such merger, consolidation or reorganization is or would be a Non-Control Transaction;


(2) A complete liquidation or dissolution of the Retention Company, unless, as evidenced by resolution of the Board of Directors of the Retention Company, (a) such liquidation or dissolution is effected primarily for the purpose of consolidating the business and assets of the liquidating or dissolving Retention Company with those of one or more other Retention Companies and (b) the principal business of the liquidating or dissolving Retention Company is continued by the surviving Retention Company immediately after such liquidation or dissolution; or


(3) An agreement for the sale or other disposition of all or substantially all of the assets of the Retention Company to any person other than one or more other Retention Companies or one or more Subsidiaries of a Retention Company.

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1.4.2 If any of the events described in Section 1.4.1, above, occur:

A. With respect to Bancorp or SBBT, then a Change of Control shall be deemed to have occurred with respect to all of the Retention Companies; or


B. Only with respect to FNBCC or Mortgage, a Change of Control shall be deemed to have occurred only with respect to FNBCC or Mortgage as appropriate.


1.4.3 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 the Retention Company as a result of the acquisition of voting securities by the Retention Company which, by reducing the number of 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 the Retention Company, and, after such acquisition by the Retention Company, the Subject Person becomes the beneficial owner of any additional voting securities of such Retention Company which increases the percentage of the then outstanding voting securities beneficially owned by the Subject Person, then a Change of Control shall occur.

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

1.6 " Coverage" means, in each Plan Year, coverage under a Group Health Insurance Plan.


1.7 " Covered Key Employee" means each person who (a) has been a " key employee," as that term is defined for purposes of Code Section 419A(d)(3), during any plan year under any plan previously maintained by Bancorp to provide health insurance coverage to retired employees, (b) had terminated employment with Bancorp prior to adoption of this Plan on December 29, 1992, and (c) as of that date satisfied the eligibility requirements set forth in Section 2.1.1A, below.

1.8 " Dependent" means, with respect to each Eligible Retiree, each person other than a Spouse who meets the definition of a " dependent" with respect to the Eligible Retiree under a Group Health Insurance Plan.


1.9 " Effective Date" means December 30, 1998.

1.10 " Eligible Retiree" means each Former Employee (other than a person who, in the current Plan Year or any preceding Plan Year, is or has been a Key Employee) who satisfies the eligibility criteria set forth in Section 2.1.1, below.

1.11 " Employee" means each person who is a common law employee of Bancorp or any Affiliate of Bancorp.


1.12 " Employer" means Bancorp and each Affiliate of Bancorp.

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

1.14 " FNBCC" means First National Bank of Central California, a national banking organization and wholly owned subsidiary of Bancorp, one of the branches of which operates under the name " South Valley National Bank," as well as each entity acquired by or merged with or into First National Bank of Central California.


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1.15 " Former Employee" means each person who previously has been an Employee but who, as of the time the determination of the person' s employment status is being made, no longer is an Employee as a result of an event or circumstance other than the death of such person.

1.16 " Group Health Insurance Plan" means, in each Plan Year, each group medical insurance plan and each group dental insurance plan under which Bancorp offers medical or dental insurance coverage to Employees in such Plan Year.


1.17 " Hour of Service" means each hour for which an Employee (a) is directly or indirectly compensated or entitled to compensation from the Employer for the performance of duties during the applicable computation period; (b) is directly or indirectly compensated or entitled to compensation by the Employer (irrespective of whether the initial employment relationship has terminated) for reasons other than the performance of duties ( e.g. , such as vacation, holidays, sickness, jury duty, disability, lay-off, military duty or leave of absence) during the applicable computation period; or (c) is awarded back pay or for which the Employer agrees to pay back pay without regard to mitigation of damages.

1.17.1 Period To Which Credited . All hours shall be credited to the Employee for the computation period to which the award or agreement concerning back pay pertains rather than to the computation period in which the award, agreement, or payment is made. The same Hours of Service shall not be credited under (a) or (b), as the case may be, and under (c), above.

1.17.2 Limitations on Crediting . Notwithstanding any provision of this Plan to the contrary, (a) no more than 501 Hours of Service shall be credited to an Employee on an account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computation period); (b) an hour for which an Employee is directly or indirectly paid or entitled to payment, on account of a period during which no duties are performed, is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker' s compensation, or unemployment compensation or disability insurance, laws; and (c) Hours of Service are not required to be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee.

1.17.3 Regulations . The definition of " Hours of Service" shall be determined in accordance with the definition of that term set forth in Department of Labor Regulations a72530.200b-2(b)&(c), the terms of which are incorporated herein by this reference.

1.18 " Incumbent Directors" for any Retention Company means Directors of the Retention Company who either (a) are Directors of the Retention Company as of the Effective Date, or (b) are elected, or nominated for election, to the Board of the Retention Company 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 (b) 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 to the Retention Company shall not be considered an Incumbent Director.


1.19 " Key Employee" means each Employee other than an Excluded Key Employee who, at any time during any Plan Year under this Plan or any plan year under any plan previously maintained


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by the Employer to provide health insurance coverage to retired employees, meets the requirements of either Sections 1.16.1, 1.16.2, 1.16.3, or 1.16.4, below:


1.19.1 Is an officer of the Employer having annual compensation greater than fifty percent (50.0%) of the limit on the amount of benefits payable under a defined benefit plan, as set forth in Code Section 415(b)(1)(A). For purposes of this Section 1.16.1, the term " officer" shall mean only those persons who have officer-type titles and exercise administrative executive authority, and the persons who qualify as " officers" under such definition shall be determined by the board of directors of the Employer or its designee;


1.19.2 Is one of the ten (10) employees of the Employer who (a) has annual compensation from the Employer in an amount greater than the limitation on the maximum contributions which can be made to defined contribution plans under Code Section 415(c)(1)(A), and (b) owns (or by reason of the constructive ownership rules of Code Section 318) is deemed to own the largest portions of the outstanding shares of the Employer' s common capital stock;


1.19.3 Employee of the Corporation who owns more than five percent (5.0%) of the outstanding capital stock of the Employer or capital stock possessing more than five percent (5.0%) of the total combined voting power of all capital stock of the Employer; or

1.19.4 Employee of the Corporation who both (a) owns more than one percent (1.0%) of the outstanding capital stock of the Employer, or owns capital stock of the Employer possessing more than one percent (1.0%) of the total combined voting power of all outstanding shares of the Employer' s capital stock, and (b) receives from the Employer compensation of more than One Hundred Fifty Thousand Dollars ($150,000) per year.


1.20 " Merger Transaction" means that certain merger transaction in which Target merged with and into Bancorp effective as of December 30, 1998.

1.21 " Non-Control Acquisition" means an acquisition of any voting securities of a Retention Company by (a) an employee benefit plan (or a trust forming a part thereof) maintained by Bancorp, (b) Bancorp or any of its Subsidiaries, or (c) any person in connection with a Non-Control Transaction.


1.22 " Non-Control Transaction" means:

1.22.1 A merger, consolidation or reorganization of a Retention Company in which:


A. The shareholders of the Retention Company, 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 the Retention Company 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 paren ...