ADDENDUM INCORPORATING EGTRRA COMPLIANCE AMENDMENT

Exhibit 10.1.4.2

 

 

ADDENDUM INCORPORATING

 

EGTRRA COMPLIANCE AMENDMENT

TO

 

Name of Plan: PACIFIC CAPITAL BANCORP

 

EMPLOYEE STOCK OWNERSHIP PLAN

 

                                                                                                                                               (the Plan’)

 

This Amendment to the Plan is adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). This Amendment is intended as good faith compliance with the requirements of EGTRRA and is to be construed in accordance with EGTRRA and guidance issued thereunder. Except as otherwise provided, this Amendment shall be effective as of the first day of the first Plan Year beginning after December 31, 2001.

 

This Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this Amendment.

 

References to provisions by Plan Section or Article numbers in this Amendment are to the provisions associated with these Section or Article numbers in the approved volume submitter specimen plan from which the Plan is generated. If the Section or Article numbers have been changed in generating the Plan, references are to the provisions in the Plan that are associated with the Section or Article numbers in the approved volume submitter specimen plan.

 

AMENDMENT SECTION 1: PLAN LOANS FOR OWNER-EMPLOYEES AND SHAREHOLDER EMPLOYEES

 

¨	Select this Amendment Section 1 if the Plan provides for loans. (Do not select if the Plan does not provide for loans.)

 

Effective for plan loans made after December 31, 2001, the provisions of Section 12.1 prohibiting loans to any owner-employee or shareholder-employee shall cease to apply.

 

AMENDMENT SECTION 2: LIMITATIONS ON CONTRIBUTIONS

 

x	All Plans must select this Amendment Section 2.

Effective for “limitation years” beginning after December 31. 2001, the first sentence of the Section in Article VII entitled “Code Section 415 Limitations on Crediting of Contributions and Forfeitures” is amended to provide as follows:

 

Except to the extent permitted under Amendment Section 11 and Code Section 414(v), if applicable, the “annual addition” that may be contributed or allocated to a Participant’s Account under the Plan for any “limitation year” shall not exceed the lesser of:

 

(a)

$40,000, as adjusted for increases in the cost-of-living under Code Section 415(d), or

 

(b)

100 percent of the Participant’s compensation, within the meaning of Code Section 415(c)(3), for the “limitation year”. The compensation limit referred to in this paragraph (b) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code Section 401(h) or 419A(f)(2)), which is otherwise treated as an “annual addition”.

 

AMENDMENT SECTION 3: INCREASE IN COMPENSATION LIMIT

 

x	Select this Amendment Section 3 to increase the Compensation limit applicable under Code Section 401(a)(17) to the new $200,000 limit. (If you do not wish to increase to the new Compensation limit, do not select this Amendment Section 3.)

 

The annual Compensation of each Participant taken into account in determining allocations for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(B). Annual Compensation means Compensation during the Plan Year or such other consecutive 12-month period over which Compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual Compensation for the determination period that begins with or within such calendar year.

 

AMENDMENT SECTION 4. MODIFICATION OF TOP-HEAVY RULES

 

x	Select this Amendment Section 4 if the Plan covers non-collectively bargained employees. (If the Plan covers collectively bargained employees only, do not select this Amendment Section 4.)

 

This Section shall apply for purposes of determining whether the Plan is a top-heavy plan under Code Section 416(g) for Plan Years beginning after December 31, 2001, and whether the Plan satisfies the minimum benefits requirements of Code Section 416(c) for such years. This Section amends Article XXII of the Plan.

A.	The definition of “key employee” in Section 22.1 is amended to provide as follows:

 

A “key employee” means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the “determination date” was an officer of an Employer or a Related Company having annual compensation greater than $130,000 (as adjusted under Code Section 416(i)(l) for Plan Years beginning after December 31, 2002), a 5-percent owner of an Employer or a Related Company, or a 1-percent owner of an Employer or a Related Company having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of Code Section 415(c)(3). The determination of who is a “key employee” will be made in accordance with Code Section 416(i)(1) and the applicable regulations and other guidance of general applicability issued thereunder.

 

B.	The definition of “top heavy plan” in Section 22.1 is modified for purposes of determining the present values of accrued benefits and the amounts of account balances of employees as of a “determination date” as follows:

 

The present values of accrued benefits and the amounts of account balances of an Employee as of the “determination date” shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Code Section 41 6(g)(2) during the one-year period ending on the “determination date”. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting “five-year period” for “one-year period”. The accrued benefits and accounts of any individual who has not performed services for an Employer or any Related Company during the one-year period ending on the “determination date” shall not be taken into account.

 

C.	The Section in Article XXII entitled “Minimum Employer Contributions” is modified in the following respect:

 

Employer matching contributions shall he taken into account for purposes of satisfying the minimum contribution requirements of Code Section 416(c)(2) of the Plan. The preceding sentence shall apply with respect to Matching Contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Code Section 401(m).

AMENDMENT SECTION 5: VESTING OF EMPLOYER MATCHING CONTRIBUTIONS

 

¨	Select this Amendment Section 5 and complete the selections below if the Plan provides for Matching Contributions that do not vest at least as rapidly as under the 3-year clj(f or 2-6 year graded vesting schedules as required by EGTRRA Section 633.

 

Effective for Plan Years beginning after December 31, 2001, the Section in Article VI entitled “Vesting of Employer Contributions” is amended to provide as follows:

 

A.

A Participant’s Matching Contributions Sub-Account shall vest in accordance with the following schedule:

 

¨

A Participant’s vested interest in his Matching Contributions Sub-Account shall be 100 percent (full and immediate vesting).

 

or

 

¨

A Participant’s vested interest in his Matching Contributions Sub-Account shall be zero percent until he has completed three years of Vesting Service and shall then be 100 percent (3-year cliff vesting).

 

or

 

¨

A Participant’s vested interest in his Matching Contributions Sub-Account shall be determined in accordance with the 2-6 year graded schedule as follows:

 

 

or

¨

A Participant’s vested interest in his Matching Contributions Sub-Account shall be determined in accordance with the alternative vesting schedule below (must be at least as favorable at every level as the 2-6 year graded schedule):