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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PACIFIC CAPITAL BANCORP
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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2000 PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
[PHOTO]
PACIFIC CAPITAL BANCORP
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PACIFIC CAPITAL BANCORP
Dear Fellow Shareholders:
Please accept this invitation to attend our 2000 Annual Shareholders'
Meeting. The meeting will be held Tuesday, April 25, at 2:00 p.m. at the Lobero
Theatre, 22 East Canon Perdido, in Santa Barbara.
Our agenda will include the election of 12 directors, a vote on proposals
to amend our stock option plans, and ratification of the selection of our
outside auditors. We will also take this opportunity to provide you with a
report on our 1999 performance, and answer any question you might have about
the Company's past performance or our future plans. Our products and services
exhibit will be open before and after the meeting.
In our continued efforts to make it easier for shareholders to place their
votes, we are including the convenience of telephone voting this year.
Easy-to-follow telephone voting instructions are included on your proxy card,
and we encourage you to take advantage of this convenient, cost effective way
to place your vote.
Please accept our thanks for your continued confidence in our Company. We
look forward to seeing you at the meeting.
Sincerely,
/s/ DONALD M. ANDERSON
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Donald M. Anderson
Chairman of the Board
/s/ DAVID W. SPAINHOUR
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David W. Spainhour
President
/s/ WILLIAM S. THOMAS, JR.
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William S. Thomas, Jr.
Vice Chairman & Chief Operating Officer
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PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C>
NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS....................................1
PROXY STATEMENT
Questions and Answers.........................................................2
Proposals to be Voted Upon....................................................5
Board of Directors...........................................................10
Board and Committee Meetings.................................................13
Compensation Committee Interlocks............................................14
Director Compensation........................................................14
Executive Officers...........................................................15
Executive Compensation
Beneficial Ownership Table...............................................16
Summary Compensation Table...............................................17
Key Employee Retiree Health Plan.........................................18
Management Retention Plan................................................18
Option Grants Table......................................................19
Option Exercises and Fiscal Year-end Values Table........................20
Performance Graph............................................................21
Report of the Governance and Compensation Committee..........................22
Other Information
Certain Transactions.....................................................23
Section 16(a) Beneficial Ownership Reporting Compliance..................23
Submission of Shareholder Proposals......................................23
Solicitation Expenses....................................................24
Director Nominations.....................................................24
Financial Materials......................................................24
Exhibit A - Description of the 1996 Directors Stock Option Plan..............25
Exhibit B - Description of the Restricted Stock Option Plan..................29
</TABLE>
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NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS
[PACIFIC CAPITAL BANCORP LOGO]
200 East Carrillo Street
P. O. Box 1119
Santa Barbara, CA 93102-1119
March 17, 2000
To Our Shareholders
The Annual Meeting of Shareholders of Pacific Capital Bancorp will be held
on Tuesday, April 25, 2000, at 2:00 p.m., at the Lobero Theatre, 33 East Canon
Perdido, Santa Barbara, California, to consider and take action on the following
proposals:
1. Elect 12 directors: Donald M. Anderson, Edward E. Birch, Richard M.
Davis, Dale E. Hanst, D. Vernon Horton, Roger C. Knopf, Clayton C.
Larson, Richard A. Nightingale, Kathy J. Odell, William H. Pope, David
W. Spainhour and William S. Thomas, Jr., each for a term of one year;
2. Approve an increase to the number of shares allocated to the 1996
Directors' Stock Option Plan along with other amendments to this plan;
3. Approve an increase to the number of shares allocated to the Restricted
Stock Option Plan along with other amendments to this plan;
4. Ratify Arthur Andersen LLP as independent accountants for 2000; and
5. Such other business as may properly come before the Meeting.
Shareholders who owned shares of our stock at the close of business on March
2, 2000 are entitled to attend and vote at the Annual Meeting. This notice, the
proxy statement, a proxy and voting instruction card, and the 1999 Annual Report
are being distributed on or about March 17, 2000.
Regardless of whether you plan to attend the meeting in person, we urge you
to vote in favor of each of the proposals as soon as possible.
By Order of the Board of Directors
Jay D. Smith
Senior Vice President, General Counsel &
Secretary
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QUESTIONS AND ANSWERS
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Q: WHO IS ENTITLED TO VOTE?
A: Shareholders who own Company stock as of the close of business on March 2,
2000 (the Record Date) may attend and vote at the annual meeting. Each share
is entitled to one vote. There were 24,558,936 shares of our stock
outstanding on the Record Date.
Q: WHAT IS THE PROXY CARD?
A: The proxy card enables you to appoint Donald M. Anderson, David W. Spainhour
and Jay D. Smith as your representatives at the annual meeting. By
completing and returning the proxy card, you are authorizing them to vote
your shares at the meeting as you instructed on your proxy card. This way,
your shares will be voted whether or not you attend the meeting. Even if you
plan to attend the meeting, it is a good idea to complete and return your
proxy card before the meeting date just in case your plans change.
If a proposal comes up for vote at the meeting that is not on the proxy
card, Messrs. Anderson, Spainhour, and Smith will vote your shares, under
your proxy, according to their best judgment.
Q: WHAT AM I VOTING ON?
A: You are voting on:
- the election of 12 directors (Donald M. Anderson, Edward E. Birch,
Richard M. Davis, Dale E. Hanst, D. Vernon Horton, Roger C. Knopf,
Clayton C. Larson, Richard A. Nightingale, Kathy J. Odell, William H.
Pope, David W. Spainhour and William S. Thomas, Jr.);
- approval to increase the number of shares allocated to the 1996
Directors' Stock Option Plan and other amendments to this plan;
- approval to increase the number of shares allocated to the Restricted
Stock Option Plan and other amendments to this plan; and
- the ratification of Arthur Andersen LLP as our independent accountants
See the section entitled "Proposals To Be Voted On" for more
information.
Q: HOW DO I VOTE?
A: You may vote by mail. Mark your choices on the enclosed proxy card and sign,
date and return it in the enclosed self-addressed envelope. If you sign your
proxy card but do not make any selections, your shares will be voted:
- for the 12 named nominees for directors;
- for the proposed amendments to the Directors' Stock Option Plan;
- for the proposed amendments to the Restricted Stock Option Plan; and
- for the ratification of the auditors.
You may vote by telephone. Follow the "Vote by Telephone" instructions that
came with your proxy card. If you vote by telephone, you do not have to mail
in your proxy card.
You may vote in person at the meeting. We will pass out written ballots to
anyone who wants to vote at the meeting. However, if you hold your shares in
street name, you must request a proxy from your stockbroker in order to vote
at the
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meeting. Holding shares in "street name" means you hold them in an account
at a brokerage firm.
Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
A: Your shares are probably registered differently or are in more than one
account. Vote all proxy cards to ensure that all your shares are voted.
Unless you need multiple accounts for specific purposes, we recommend you
consolidate as many of your accounts as possible under the same name and
address. If the shares are registered in your name, contact our transfer
agent, Norwest Shareowner Services (800-468-9716); otherwise, contact your
brokerage firm.
Q: HOW DO I REVOKE MY PROXY?
A: You may revoke your proxy and change your vote at any time before the polls
close at the meeting. You may do this by:
- signing another proxy with a later date;
- voting by telephone (your latest vote is counted); or
- voting at the meeting.
Q: WILL MY SHARES BE VOTED IF I DO NOT RETURN MY PROXY CARD?
A: If your shares are held in street name, your brokerage firm, under certain
circumstances, may vote your shares. Under NASDAQ rules, brokerage firms
have authority to vote customers' unvoted shares on "routine" matters. We
have determined that all of our proposals are routine matters.
If you do not give a proxy to vote your shares, your brokerage firm may
either:
- vote your shares on routine matters, or
- leave your shares unvoted.
We encourage you to provide instructions to your brokerage firm by giving
your proxy. This ensures your shares will be vote at the meeting.
You may have granted to your stockbroker discretionary voting authority over
your account. Depending on the terms of your agreement with your
stockbroker, the firm may be able to vote your shares.
Q: HOW ARE ABSTENTIONS AND BROKER NON-VOTES TREATED?
A: Since the affirmative vote of the holders of a majority of the shares of our
common stock present and voting is required to approve the proposals (other
than the election of directors), abstentions and broker non-votes will be
counted for purposes of satisfying the quorum requirement. Abstentions will
be counted as voting shares and will have the effect of a vote "against" the
proposals. Broker non-votes will not be counted as shares voting on the
proposals.
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Q: HOW MANY SHARES MUST BE PRESENT TO HOLD THE MEETING?
A: To hold the meeting and conduct business, a majority of our shares
outstanding as of March 2, 2000, must be present at the meeting. This is
called a quorum.
Shares are counted as present at the meeting if the shareholder:
- is present and votes in person at the meeting,
- has properly submitted a proxy card, or
- has voted by telephone.
Q: HOW MANY VOTES MUST THE NOMINEES HAVE TO BE ELECTED AS DIRECTORS?
A: The 12 nominees receiving the highest number of yes votes will be elected as
directors. This number is called a plurality.
We use the phrase "yes vote" to mean a vote for a proposal.
Q: WHAT HAPPENS IF A NOMINEE IS UNABLE TO STAND FOR ELECTION?
A: The Board may reduce the number of directors or select a substitute nominee.
In the latter case, if you have completed and returned your proxy card,
Messrs. Anderson, Spainhour and Smith can vote your shares for a substitute
nominee. They cannot vote for more than 12 nominees.
Q: HOW MANY VOTES MUST THE AMENDMENTS TO THE STOCK OPTION PLANS HAVE TO PASS?
A: To pass, the amendments must receive the yes vote of a majority of the
shares present and voting at the meeting in person or by proxy, but not less
than a majority of the shares required for a quorum.
Q: HOW MANY VOTES MUST THE PROPOSAL TO RATIFY THE AUDITORS HAVE TO PASS?
A: To pass, the proposal must receive the yes vote of a majority of the shares
present at the meeting in person or by proxy, but not less than a majority
of the shares required for a quorum.
Q: HOW ARE VOTES COUNTED?
A: You may vote either "for" or "against" each nominee. You may vote "for,"
"against" or "abstain" on the proposals to amend the stock option plans and
to ratify the auditors.
If you abstain from voting, it has the same effect as a "no" vote.
If you give your proxy without voting instructions, your shares will be
counted as a yes vote for each nominee, for the amendments to the stock
option plans and for the ratification of the auditors.
Voting results are tabulated and certified by our transfer agent, Norwest
Shareowner Services.
Q: IS MY VOTE KEPT CONFIDENTIAL?
A: Proxies, ballots and voting tabulations identifying shareholders are kept
confidential and will not be disclosed except as may be necessary to meet
legal requirements.
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Q: WHERE DO I FIND THE VOTING RESULTS OF THE MEETING?
A: We will announce preliminary voting results at the meeting. Final results
will be published in our quarterly report on Form 10-Q for the second
quarter of 2000. We will file that report with the Securities and Exchange
Commission. You may obtain a copy by calling our Shareholder Relations
Hotline (805) 564-6302 or the SEC at (800) SEC-0330 for the location of its
nearest public reference room. You can also get a copy on the Internet
through the SEC's electronic data system called EDGAR at www.sec.gov or
through our website at www.pcbancorp.com.
PROPOSALS TO BE VOTED UPON
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1. ELECTION OF DIRECTORS
Nominees for election this year are: Donald M. Anderson, Edward E.
Birch, Richard M. Davis, Dale E. Hanst, D. Vernon Horton, Roger C. Knopf,
Clayton C. Larson, Richard A. Nightingale, Kathy J. Odell, William H. Pope,
David W. Spainhour and William S. Thomas, Jr.
Each nominee except Mr. Nightingale is currently a director of the
Company. All of the nominees have consented to serve a one-year term.
The Board recommends a vote for these nominees.
2. AMENDMENTS TO THE 1996 DIRECTORS' STOCK OPTION PLAN
The 1996 Directors Stock Option Plan (the "Directors Plan") permits
stock option grants to nonemployee Directors of the Company. On February 22,
2000, the Board of Directors approved the following amendments to the Directors
Plan:
- Increase the number of shares of common stock authorized in the
Directors Plan by 250,000 shares;
- Provide that future amendments to the Directors Plan will not
require stockholder approval unless required by applicable law;
- Permit awards other than stock options, such as restricted stock
and stock appreciation rights; and
- Allow a Committee of the Board to administer the Directors Plan and
to have authority for decisions relating to options and other
awards granted under this plan.
A description of the Directors Plan is attached as Exhibit A.
REASONS FOR AMENDMENT
o Increase in Shares Covered by the Directors Plan
The current number of shares authorized by the Directors Plan is
300,000. A total of 75,146 shares have been issued for exercises of stock
options previously granted under the Directors Plan, and a total of 204,754
shares are reserved for outstanding shares. As a result, only 20,100 shares
remain available for option grants under the Directors Plan.
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We believe that it is important to grant options and other awards to
attract and retain qualified directors who can contribute to our continued
growth and success. By increasing the number of authorized shares, we can
provide an adequate reserve of shares to permit option grants and other awards.
Procedure for Future Amendments to the Directors Plan
Currently, the Directors Plan states that our shareholders must approve
amendments to accomplish any of the following:
- materially increase the number of shares which may be issued under
the Directors Plan;
- materially modify the requirements as to eligibility for
participation in the Plan; or
- otherwise materially increase the benefits accruing to participants
under the Directors Plan.
We propose to amend the Directors Plan to provide that future amendments
will not require shareholder approval unless required by applicable law, such
as:
- an amendment to increase the number of shares of common stock
authorized by the Directors Plan; or
- an amendment which must be approved under the rules of NASDAQ or
any exchange on which our common stock is listed.
Generally, this means that amendments would have to be approved by our
shareholders only if the amendment would increase the number of shares
authorized by the Directors Plan.
Most public companies presently follow this approach for their stock
incentive plans. Often, the shareholders' principal concern is to limit their
dilution resulting from awards under a stock incentive plan. Dilution results
primarily from the increase in the number of shares of common stock authorized
by the Directors Plan. The proposed amendment would continue to require
shareholder approval to increase the number of shares authorized, but would
simplify the procedure for us to amend the Directors Plan in other cases.
o Authorize Awards other than Stock Options
We propose to amend the Directors Plan to allow grants of stock
incentives other than stock options, including:
- the issuance of common stock, either in exchange for payment of a
purchase price or as a stock bonus;
- stock appreciation rights; and
- stock options and shares of common stock that will become
exercisable based on the Company's performance or that of the
particular director.
We anticipate that the majority of awards under the Directors Plan will
continue to be stock options. It may be appropriate, however, to consider awards
of stock appreciation rights or other forms of stock incentives to facilitate
compliance by insiders with applicable federal and state securities laws and the
qualification of future acquisitions for pooling accounting.
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o Administration Provisions
We intend to allow a Committee of the Board to administer the Directors
Plan and to have authority for decisions relating to options and other awards
granted under the Directors Plan. This amendment will not materially change any
of the terms or provisions of the Directors Plan or the amount or type of awards
that may be granted. The Board of Directors could effect this amendment without
shareholder approval, but seeks approval along with the other amendments
described above.
We believe that approval of these amendments to the Directors Plan is
necessary and appropriate for the proper administration of the Directors Plan,
to enable us to attract and retain qualified individuals to the Board of
Directors and to adequately compensate them for their services.
o Shareholder Approval
Approval of the foregoing amendments to the Directors Plan will require
the affirmative vote of a majority of the shares present (whether in person or
by proxy) and voting at the shareholders' meeting.
The Board of Directors recommends a vote "For" approval of the
amendments to the 1996 Directors Stock Option Plan.
3. AMENDMENTS TO THE RESTRICTED STOCK OPTION PLAN
The Restricted Stock Option Plan (the "Restricted Plan") permits stock
option grants to officers and employees of the Company and its Subsidiaries for
the purposes of attracting, motivating and retaining the best available officers
and employees. We believe that options provide additional incentive to promote
the success of our business.
On February 22, 2000, the Board of Directors approved the following
amendments to the Restricted Plan:
- Increase the number of shares of common stock authorized in the
Restricted Plan by 750,000 shares;
- Provide that future amendments to the Restricted Plan will not
require shareholder approval unless required by applicable law;
- Permit awards other than stock options, such as restricted stock
and stock appreciation rights; and
- Allow a Committee of the Board to administer the Restricted Plan
and to have authority for decisions relating to options and other
awards granted under this plan.
A description of the Restricted Plan is attached as Exhibit B.
REASONS FOR AMENDMENT
o Increase in Shares Authorized by the Restricted Plan
The current number of shares authorized by the Restricted Plan is
2,600,000. A total of 1,502,498 shares of common stock have been issued for
exercises of stock options previously granted under the Restricted Plan, and a
total of 1,018,732 shares are reserved for outstanding options. As a result,
only 78,770 shares remain available for option grants under the Restricted Plan.
We believe that it is important to grant options and other awards to
attract and retain qualified employees who can contribute to our continued
growth and success. By increasing the number of authorized shares, we can
provide an adequate reserve of shares to permit option grants and other awards.
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o Procedure for Future Amendments to the Restricted Plan
Currently, the Restricted Plan states that our shareholders must approve
amendments to accomplish any of the following:
- materially increase the number of shares which may be issued;
- materially modify the eligibility requirements for participation;
or
- otherwise materially increase the benefits accruing to
participants.
We propose to amend the Restricted Plan to provide that future
amendments will not require shareholder approval unless required by applicable
law, such as:
- an amendment to increase the number of shares of common stock
authorized by the Restricted Plan;
- an amendment that must be approved for purposes of complying with
the requirements of Section 422 of the Internal Revenue Code
relating to the grant of incentive stock options; and
- an amendment which must be approved under the rules of NASDAQ or
any exchange on which our common stock is listed.
Generally, this means that amendments would have to be approved by our
shareholders only if the amendment would increase the number of shares of common
stock authorized by the Restricted Plan.
Most public companies presently follow this approach for their stock
incentive plans. Often, the shareholders' principal concern is to limit their
dilution resulting from awards under an employee stock incentive plan. Dilution
results primarily from the increase in the number of shares of common stock
authorized by the Restricted Plan. The proposed amendment would continue to
require shareholder approval and would simplify the procedure for us to amend
the Restricted Plan in other cases.
o Authorize Awards other than Stock Options
We propose to amend the Restricted Plan to permit stock incentive grants
other than stock options, including:
- the issuance of shares of common stock, either in exchange for
payment of a purchase price or as a stock bonus;
- stock appreciation rights; and
- stock options and shares of common stock that will become
exercisable based on the performance of the Company or the
particular employee.
We anticipate that the majority of the awards under the Restricted Plan
will continue to be stock options. However, it may be appropriate to consider
granting other stock incentives in the following cases:
- Performance shares and options might be appropriate in connection
with the acquisition or establishment of a new business to
incentivize the managers of the business to quickly achieve
profitability;
- Stock appreciation rights may facilitate compliance by insiders
with applicable federal and state securities laws and the
qualification of future acquisitions for pooling accounting; and
- The issuance of shares of common stock might be an effective means
to satisfy obligations to employees for accrued or deferred
benefits or in cases where the tenure of the employee or consultant
may not support the grant of an option that vests over several
years.
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o Administration Procedures
We intend to allow a Committee of the Board to administer the Restricted
Plan and to have authority for decisions relating to options and other awards
granted under this Plan. This amendment will not materially change any of the
terms or provisions of the Restricted Plan or the amount or type of awards that
may be granted. The Board of Directors could effect this amendment without
shareholder approval, but seeks approval along with the other amendments
described above.
o Shareholder Approval
Approval of these amendments to the Restricted Plan requires the
affirmative vote of a majority of the shares present (whether in person or by
proxy) and voting at the shareholders' meeting.
The Board of Directors recommends a vote "for" approval of the
amendments to the Restricted Stock Option Plan.
4. SELECTION OF INDEPENDENT ACCOUNTANTS
The firm of Arthur Andersen, LLP served as independent certified public
accountants for the Company, SBBT and FNBCC for calendar year 1999, and your
Board has recommended the firm as our accountants for calendar year 2000.
Representatives of Arthur Andersen, LLP will be present at the meeting and will
have the opportunity to make a statement and to answer questions.
Audit services performed by Arthur Andersen, LLP for the year ended
December 31, 1999 consisted of:
- examination of our financial statements and our employee benefit
plans,
- certain services related to filings with the Securities and
Exchange Commission, and
- consultation on matters related to accounting and financial
reporting.
Arthur Andersen, LLP also performed consultation services related to the
preparation of tax returns, assistance with regulatory compliance, and
assistance with the merger with "old" Pacific Capital Bancorp. These fees
amounted to approximately 13.7% of the total fees for services paid to the firm
for the year ended December 31, 1999. The Audit Committee approved these
services and determined that the firm was fully independent of our operations.
The Board recommends a vote to ratify selection of the auditors.
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THE BOARD OF DIRECTORS
Biographies
- - Donald M. Anderson
- - Edward E. Birch
- - Richard M. Davis
- - Dale E. Hanst
DONALD M. ANDERSON
Director since 1971
Mr. Anderson, age 72, is Chairman of the Board of the Company and Vice Chairman
of Santa Barbara Bank & Trust. Mr. Anderson joined Santa Barbara Bank & Trust in
October, 1969, as Vice President and Commercial Lending Officer. He was elected
President, CEO and director in 1971 and served in those capacities until elected
Chairman of the Board in February, 1989. He has served on numerous charitable,
civic and banking organizations.
EDWARD E. BIRCH
Director since 1983
Dr. Birch, age 61, was Vice Chancellor of the University of California at Santa
Barbara from 1976 until his retirement in 1993. He is currently Executive Vice
President for Westmont College in Santa Barbara, California. He has been
involved in a number of civic and community organizations, including the Cancer
Foundation of Santa Barbara, Goleta Valley Community Hospital, the Santa Barbara
Industry Education Council, and the Santa Barbara Chamber of Commerce. Dr. Birch
is Chairman of the Corporate Governance and Compensation Committee of the
Company.
RICHARD M. DAVIS
Director since 1984
Mr. Davis, age 65, is a retired business executive. He is a past Chairman of the
Board of Directors of Santa Barbara Cottage Hospital, a past Chairman of the
Santa Barbara Chamber of Commerce, and a past Chairman of the Board of United
Way of Santa Barbara.
DALE E. HANST
Director since 1983
Mr. Hanst, age 68, is a retired attorney. He was of counsel to the law firm of
Reicker, Clough, Pfau, McRoy, Pyle & Herman, LLP and was formerly a senior
partner in the law firm of Schramm & Raddue, having started with the firm in
1960. He was President of the State Bar of California in 1984 and served on the
California Commission on Judicial Performance from 1984 to 1988. Mr. Hanst is a
past President of the Santa Barbara Zoological Society.
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Biographies
- - D. Vernon Horton
- - Roger C. Knopf
- - Clayton C. Larson
- - Richard A. Nightingale
D. VERNON HORTON
Director since 1998
Mr. Horton, age 60, is Vice Chairman of the Board of the Company and Chairman,
Chief Executive Officer and a director of First National Bank of Central
California. He was Chairman of the Board and Chief Executive Officer of the
former Pacific Capital Bancorp. His banking career commenced in 1964 with Valley
National Bank, Salinas. He served that bank in various capacities including
lending, operations, and business development and in 1979 was appointed Chief
Executive Officer and a member of the Board of Directors. In August of 1981, he
was appointed President of Valley National Bank. He resigned all positions with
Valley National Bank on December 31, 1983, to join First National Bank of
Central California. He serves as a director of Cherry's Jubilee and the
California Rodeo Association.
ROGER C. KNOPF
Director since 1998
Mr. Knopf, age 59, is the President of Knopf Construction, Inc., a general
building construction company located in Morgan Hill since 1976. He was a
director of the former Pacific Capital Bancorp and South Valley National Bank
and is currently a director of First National Bank of Central California. He has
served on many County of Santa Clara, City of Morgan Hill, and Morgan Hill
Unified School District committees. He is presently Chairman of the Board of San
Jose Medical Center and is a director of San Benito Land Title Company and the
Morgan Hill Rotary Endowment Fund.
CLAYTON C. LARSON
Director since 1998
Mr. Larson, age 53, is Vice Chairman of the Board of the Company and President,
Chief Administrative Officer and a director of First National Bank of Central
California. He was President and a director of the former Pacific Capital
Bancorp. Mr. Larson's banking career commenced in 1972 when he joined Valley
National Bank. During his tenure with Valley National Bank, he attained the
position of Senior Vice President/Branch Administrator and in 1981 became a
director of that bank. He serves on the Board of Trustees of the Monterey
Institute of International Studies, Community Hospital of the Monterey Peninsula
and the California State University Monterey Bay President's Council. He is
President of the Coalition for Research in Education (CORE), and serves on the
Advisory Boards for Leadership Monterey Peninsula, Legal Services for Seniors
and the Monterey Peninsula Chamber of Commerce.
RICHARD A. NIGHTINGALE
Mr. Nightingale, age 52, is president and managing director of Damitz, Brooks,
Nightingale, Turner & Morriset, Certified Public Accountants and Consultants. He
began his accounting career in 1971 and in 1973 joined the Santa Barbara office
of the international accounting firm of Arthur Andersen, LLP. Mr. Nightingale
was certified in 1976 and was promoted to Tax Manager in 1977. In 1982, he
joined Earl Damitz and Thomas Brooks to form the current firm. He is a member of
the Board of Directors of United Way of Santa Barbara. He was elected to the
Board of Santa Barbara Bank & Trust in 1998.
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Biographies
- - Kathy J. Odell
- - William H. Pope
- - David W. Spainhour
- - William S. Thomas, Jr.
KATHY J. ODELL
Director since 1999
Ms. Odell, age 54, is the Vice President of Enterprise Services for Agility
Communications, Inc., a telecommunications company involved in optical
networking technologies. She was formerly the Chief Operating Officer of Karl
Storz Imaging, Inc., which she co-founded in 1985 as Medical Concepts, Inc. Ms.
Odell is active in promoting entrepreneurial growth in the Santa Barbara area,
serving on the board of the Center for Entrepreneurship and Engineering
Management at the University of California at Santa Barbara and is a founding
member of VIP (Venture Investment Program), a Santa Barbara based association of
angel investors. Additionally, she serves on the boards of the Santa Barbara
Chamber of Commerce, Santa Barbara Industrial Association, Santa Barbara
Regional Economic Community Project and is a member of the Advisory Council of
the College of Engineering, University of California at Santa Barbara.
WILLIAM H. POPE
Director since 1998
Mr. Pope, age 72, is a retired certified public accountant. He was a director of
the former Pacific Capital Bancorp and is currently a director of First National
Bank of Central California. In 1960, Mr. Pope was instrumental in the formation
of the firm of Kasavan and Pope, which now has offices in Salinas and Monterey.
He holds memberships in the American Institute of Certified Public Accountants
as well as the California Society of CPAs.
DAVID W. SPAINHOUR
Director since 1974
Mr. Spainhour, age 68, is President and Chief Executive Officer of the Company
and Chairman of the Board of Santa Barbara Bank & Trust. Mr. Spainhour joined
Santa Barbara Bank & Trust in 1966 as Controller. He became Senior Vice
President in 1972, was elected to the Board of Directors in 1974, was named
Executive Vice President in 1980, and elected President in February, 1989. He
served as President and CEO of Santa Barbara Bank & Trust until December, 1995.
Mr. Spainhour serves on the boards of the Santa Barbara Industry Education
Council, Channel City Club, Covenant Benevolent Institutions, Westmont College,
and United Way of Santa Barbara.
WILLIAM S. THOMAS, JR.
Director since 1995
Mr. Thomas, age 56, is the Vice Chairman and Chief Operating Officer of the
Company and President and Chief Executive Officer of Santa Barbara Bank & Trust.
Mr. Thomas joined Santa Barbara Bank & Trust in 1994 as Manager of the Trust and
Investment Services Division. Prior to coming to Santa Barbara Bank & Trust, Mr.
Thomas was an Executive Vice President of Bank of America and Manager of the
Financial Institutions Group from 1992 to 1994. Prior to that time, he spent
sixteen years with Security Pacific National Bank in various capacities until
its merger with Bank of America. His last position with Security Pacific was
Executive Vice President and Manager, Financial Institutions. He is a member of
the Board of Directors of the Santa Barbara Museum of Art, Santa Barbara Center
for Performing Arts, C.A.L.M, Los Padres Council, Boy Scouts of America and El
Adobe Corporation. Mr. Thomas is also a trustee of the University of California
Santa Barbara Foundation.
12
<PAGE> 17
BOARD AND COMMITTEE MEETINGS
The Board held six meetings in 1999, and each director attended at least
75% of all Board and Committee meetings. The table below describes the Board's
committees. The Governance and Compensation Committee serves as the Nominating
Committee.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Name of Committee Number of
and Members Functions of the Committee Meetings in 1999
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Audit - Provides for suitable annual 9
examinations of each branch office and
administrative division of the banks
Harry B. Powell, Chairman
William H. Pope
Richard M. Davis - Responsible for reporting results of
examinations and the adequacy of internal
controls and procedures to the Board
Richard A. Nightingale, ex - Recommends to the Board any changes in doing
officio business or corrective actions necessary for
the soundness of the banks and the Company
- All members are nonemployee directors
- ---------------------------------------------------------------------------------------------------
Executive - Limited powers to act on behalf of the 1 1
Board whenever the Board is not in session.
David W. Spainhour, Chairman
William S. Thomas, Jr. - Meets only as needed and acts only by
D. Vernon Horton unanimous vote.
Clayton C. Larson
Edward E. Birch
Harry B. Powell
- ---------------------------------------------------------------------------------------------------
Governance and Compensation - Determines the Company's salary 5
philosophy.
Edward E. Birch, Chairman
Dale E. Hanst - Performs as overseer and sets
Roger C. Knopf objectives for our Salary Administration
Kathy J. Odell Program, including exempt salary ranges and
senior officers' salaries
- Administers our stock option plans and
considers nominees for election as directors.
</TABLE>
13
<PAGE> 18
COMPENSATION COMMITTEE INTERLOCKS
- - None of the members of the Governance and Compensation Committee is an
officer (or former officer) or employee of the Company or any of its
subsidiaries;
- - None of the members of the Governance and Compensation Committee have
entered into (or agreed to enter into) any transaction(s) with the Company
or any of its subsidiaries in which the amount involved exceeds $60,000;
- - No executive officers of the Company or its subsidiaries, Santa Barbara Bank
& Trust ("SBBT") or First National Bank of Central California ("FNBCC") had
any interlocking relationship with any other for-profit entity during 1999,
including serving on the compensation committee or serving as a director of
any other entity;
- - None of the members serve as directors of any company which has a class of
securities registered under or which is subject to the periodic reporting
requirements of the Securities Exchange Act of 1934 or any investment
company registered under the Investment Company Act of 1940.
DIRECTOR COMPENSATION
We do not pay directors who are also officers of the Company additional
compensation for their services as directors. In 1999, compensation for
non-employee directors included the following:
- $20,000 annual fee;
- $500 for each meeting attended;
- $2,000 for chairing a committee;
- Reimbursement for out-of-pocket expenses.
- Total fees paid to directors in 1999 were $154,517.
14
<PAGE> 19
EXECUTIVE OFFICERS
Biographies
- - David A. Abts
- - Donald E. Barry
- - Donald E. Lafler
- - Perry N. Ritenour
- - Jay D. Smith
- - Catherine R. Steinke
- - Kent M. Vining
DAVID A. ABTS
Mr. Abts, age 56, was Vice Chairman and Chief Information Officer of the Company
and Executive Vice President of SBBT. From March, 1997 to January, 1999 he was
Executive Vice President of the Company and Executive Vice President
MIS/Operations and Retail Banking for SBBT. From July, 1989 to March, 1997 he
was Senior Vice President of MIS/Operations for SBBT. Mr. Abts retired from the
Company effective March 3, 2000.
DONALD E. BARRY
Mr. Barry, age 60, is Executive Vice President of the Company and Executive Vice
President and Manager of both Wholesale and Retail Banking of SBBT, which
includes the Trust & Investment Division. From July, 1995 when Mr. Barry joined
the Bank, until January, 1999, he served as Executive Vice President of the
Company and Executive Vice President and Manager of the Wholesale Banking
Division. Before joining the Company, he was a Regional Vice President of Chase
Manhattan Bank in charge of private banking from February, 1993 to July, 1995.
DONALD E. LAFLER
Mr. Lafler, age 53, is Executive Vice President and Chief Financial Officer of
the Company and SBBT. He has served as Chief Financial Officer since 1995. From
1987 to 1995 he served as Vice President and Principal Accounting Officer of
SBBT.
PERRY N. RITENOUR
Mr. Ritenour, age 55, is Senior Vice President and Director of Risk Management
for the Company. Mr. Ritenour joined SBBT in May, 1995 as Senior Vice President,
Senior Credit Administrator. Prior to that, he worked for City National Bank in
Los Angeles for 3 years as a Senior Vice President in credit and as the General
Manager of the bank's international division.
JAY D. SMITH
Mr. Smith, age 59, is Senior Vice President, General Counsel and Corporate
Secretary of the Company and SBBT. He has served as Legal Counsel of SBBT since
July, 1979.
CATHERINE R. STEINKE
Ms. Steinke, age 46, is Senior Vice President and Director of the Human
Resources Division of SBBT. She has served in this position since March, 1993.
KENT M. VINING
Mr. Vining, age 52, is Senior Vice President and Strategic Planning Officer of
the Company and the SBBT. He served as Chief Financial Officer of SBBT from
April 1980 until July 1, 1995.
15
<PAGE> 20
EXECUTIVE COMPENSATION
BENEFICIAL OWNERSHIP TABLE
All information in the beneficial ownership chart is as of March 2, 2000
and includes share ownership for each director, the Named Officers (as defined
on page 17), and owners of more than 5 percent of our outstanding common stock.
<TABLE>
<CAPTION>
Number of Percent of
Shares Right to Outstanding
Name Owned(1) Acquire(2) Shares(3)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
Santa Barbara Bank & Trust 1,560,476 -- 6.4%
Trustee of the Pacific Capital
Bancorp Employee Stock Ownership
Plan & Trust
- ----------------------------------------------------------------------------------------
David A. Abts 68,915 24,918 *
Donald M. Anderson 517,616 2,000 2.1%
Edward E. Birch 25,376 4,600 *
Richard M. Davis 50,911 400 *
Dale E. Hanst 70,571 36,169 *
D. Vernon Horton 116,785 34,001 *
Roger C. Knopf 227,044 800 *
Clayton C. Larson 180,693 34,001 *
Kathy J. Odell -- 2,800 *
William H. Pope 63,629 800 *
Harry B. Powell 32,997 12,429 *
David W. Spainhour 448,516 20,430 1.9%
William S. Thomas, Jr. 21,104 113,194 *
Directors and Executive Officers
as a Group (19 persons) 2,138,684 377,357 10.2%
- ----------------------------------------------------------------------------------------
</TABLE>
* Less than 1%
(1) Unless otherwise indicated in the footnotes, includes shares for which the
named person:
- has sole voting and investment power,
- has shared voting and investment power with his or her spouse, or
- holds in an account under the Company's Employee Stock Ownership Plan
("ESOP")
(2) Includes stock acquirable by exercise of stock options exercisable within 60
days following March 2, 2000.
(3) Percentages are stated to include exercisable stock options.
16
<PAGE> 21
SUMMARY COMPENSATION TABLE
(as of December 31, 1999)
This table shows the annual and long-term compensation for the Chief
Executive Officer and the other four most highly compensated executive officers
of the Bank (the "Named Officers").
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
-------------------------------------------------- -------------------------
Other Securities
Annual Underlying All Other
Salary(1) Bonus(2) Compensation(3) Options(4) Compensation(5)
Name and Principal Position Year (Dollars) (Dollars) (Dollars) (Number) (Dollars)
- --------------------------- ---- --------- --------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
David W. Spainhour 1999 $200,030 $150,000 $199,087 23,019 $ 52,315
President, Pacific Capital Bancorp 1998 191,984 100,000 520,432 18,429 46,703
Chairman, Santa Barbara Bank & Trust 1997 190,896 75,000 265,605 32,560 44,105
William S. Thomas, Jr 1999 270,844 200,000 365,024 16,246 15,357
Vice Chairman & Chief Operating Officer 1998 290,013 175,000 98,834 -- 55,208
Pacific Capital Bancorp, President & 1997 243,353 125,000 68,623 30,000 20,931
Chief Executive Officer,
Santa Barbara Bank & Trust
D. Vernon Horton 1999 346,309 250,000 3,000 10,000 42,086
Vice Chairman, Pacific Capital Bancorp 1998 212,742 250,000 3,000 -- --
Chief Executive Officer & Chairman, 1997 196,984 250,000 -- -- --
First National Bank
Clayton C. Larson 1999 348,536 250,000 4,697 10,000 25,496
Vice Chairman, Pacific Capital Bancorp 1998 205,817 250,000 4,430 -- --
President & Chief Administrative Officer, 1997 190,571 250,000 -- -- --
First National Bank
David A. Abts 1999 167,176 100,000 173,146 5,000 23,284
Executive Vice President, 1998 149,172 90,000 322,347 -- 21,892
Retail Banking, MIS and Operations 1997 144,704 75,000 264,828 27,918 25,917
Pacific Capital Bancorp
</TABLE>
(1) Includes salary continuation payments for Messrs. Horton and Larson of
$127,176 and $122,088, respectively, resulting from employment contracts
entered into with the former Pacific Capital Bancorp.
(2) Amounts in this column represent bonuses awarded by the Company's
Governance and Compensation Committee upon evaluation of performance during
fiscal years 1998, 1997 and 1996, respectively, but paid during fiscal
years 1999, 1998 and 1997, respectively. Please refer to the Report of the
Governance and Compensation Committee on page 22 for additional
information.
(3) Includes insurance premiums (other than term insurance) and dues and
memberships paid on behalf of the Named Officers. Amounts for Messrs.
Thomas, Spainhour and Abts include $361,964, $195,882 and $171,548,
respectively, which represent the difference between the grant price for
stock options purchased and the fair market value of the options at the
date of exercise.
(4) Please see the table on page 19 for a detailed explanation.
17
<PAGE> 22
(5) Includes ESOP cash contributions and dividends paid on ESOP shares, term
life insurance premiums, amounts contributed by the Company on behalf of
the Named Officers to our Incentive & Investment and Salary Savings Plan (a
defined contribution profit sharing plan which includes 401(k) savings and
matching contribution features). Discretionary contributions are allocated
among Plan participants ratably based on their relative compensation
levels. Under the 401(k) savings feature, we match $1.00 for every $1.00 of
voluntary employee contributions up to 3% of employee compensation and $.50
for every $1.00 of the next 3% of compensation up to a maximum of 4.5% of
compensation.
<TABLE>
<CAPTION>
ESOP Share Allocations
-----------------------
Total
No. of Shares
I & I 401(k) ESOP Cash Shares Allocated Term Life
Discretionary Matching Contributions Allocated as of Insurance
Contributions Contributions and Dividends in 1999 12/31/99 Premiums
------------- ------------- ------------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
David W. Spainhour $-0- $ 7,200 $44,347 260 52,287 $ 768
William S. Thomas, Jr -0- 7,200 7,894 259 1,658 263
D. Vernon Horton -0- 7,200 33,312 602 15,131 1,574
Clayton C. Larson -0- 7,200 17,348 601 14,882 948
David A. Abts -0- 7,200 15,785 259 12,617 299
</TABLE>
KEY EMPLOYEE RETIREE HEALTH PLAN
The Key Employee Retiree Health Plan is maintained for the benefit of
the Named Officers and other "key" employees and was adopted on December 29,
1992. This is an unfunded plan which pays a portion of health insurance coverage
for retired key employees and their spouses (but not dependents). While the
Named Officers may be eligible for coverage under this Plan when they retire,
the Company paid no amounts during 1999, nor were any amounts contributed to the
Plan. A similar program is maintained for all of our other employees.
MANAGEMENT RETENTION PLAN
The Named Officers, and other officers selected by the Board of
Directors, are eligible to participate in our Management Retention Plan, which
provides severance compensation if their employment is terminated following
certain "change in control" provisions in the plan. Disinterested members of the
Board of Directors approved the Retention Plan during 1998. In order to receive
benefits under this plan, the participant must be terminated involuntarily
without cause or be constructively terminated within 24 months following a
change in control.
The amount of severance benefits payable to a participant is an amount
equal to a specified percentage of the person's average annual compensation. The
severance percentage varies from 200% of the average annual compensation for the
Chairman of the Board of the Company and four other officers to 100% of the
average annual compensation for officers in other salary grades. An officer's
average annual compensation generally is an amount equal to the average of the
officer's annual cash salary, bonus and commissions payable for each of the
three fiscal years ended immediately prior to the termination of the officer's
employment.
Additionally, the Key Employee Retiree Health Plan provides for the
continuation of benefits under certain circumstances following a change in
control of the Company.
OPTION GRANTS TABLE
(as of December 31, 1999)
18
<PAGE> 23
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------
Number of
Securities % of Total
Underlying Options
Options Granted to Exercise Grant Date
Granted in Employees in Price Expiration Present
Name 1999(1) Fiscal 1999 (per share) Date Value(2)
- ---- ---------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
David W. Spainhour 9,545* 1.74% $ 29.52 6/11/04 $57,843
10,000 1.83% 30.21 8/23/09 62,300
3,474* 0.63% 31.28 12/10/04 22,512
William S. Thomas, Jr 3,194* 0.58% 23.96 3/10/04 15,172
3,052* 0.56% 29.52 6/11/04 18,495
10,000 1.83% 30.21 8/23/09 62,300
Clayton C. Larson 10,000 1.83% 30.21 8/23/09 62,300
D. Vernon Horton 10,000 1.83% 30.21 8/23/09 62,300
David A. Abts 5,000 0.91% 29.98 7/27/04 30,850
</TABLE>
* reload grants
(1) Option grants in 1999 were made under the Directors Stock Option Plan and
Restricted Stock Option Plan and are administered by the Governance and
Compensation Committee. Except for reload options, the following terms
apply:
- They vest over a period of five through ten years at the rate of 20% per
year
- Until March 24, 1998, shares issued upon exercise of options granted under
the Restricted Stock Option Plan could not be transferred without the
approval of the Committee for five years following the option grant or two
years following the exercise of the option, whichever was later. The Plan
was amended as of March 24, 1998 to remove this restriction.
A "reload" option is granted when someone exercises a stock option by
tendering stock already owned. The number of shares granted is equal to
the number of shares tendered in payment of the option exercise price. The
exercise price is the fair market value of the Company's stock as of the
date the shares are tendered. Reload options vest and first become
exercisable one year following grant. There are also certain restrictions
on reload options which are described in the Company's stock option plans.
(2) Values are based on a binomial pricing model adapted for use in valuing
executive stock options. The actual value a Named Officer may realize will
depend on the excess of the stock price over the exercise price on the
date the option is exercised. There is no assurance that the value
realized by a Named Officer will be at or near the value estimated by the
binomial model. Estimated values are based on certain assumptions as to
variables, such as interest rates, stock price volatility and future
dividend yield. Calculations for the present value of the options are
based on the expected term of four years, a risk-free rate of return
ranging from 4.56% to 6.02%, an annual dividend yield ranging from 2.15%
to 3.16%, and stock price volatility of 23.55%.
19
<PAGE> 24
OPTION EXERCISES AND FISCAL YEAR-END VALUES TABLE
This table shows the number and values of stock options (exercised and
unexercised) for the Named Officers during 1999.
Aggregate Option Exercises in 1999 and
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Shares Number of Shares Value of Unexercised
Acquired Underlying Unexercised in-the-Money Options at
on Value Options Held at 12/31/99 12/31/99($)(1)
Exercise Realized(1) --------------------------- ------------------------------
Name in 1999 (Dollars) Exercisable Unexercisable Exercisable Unexercisable
---- ------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David W. Spainhour 20,758 $195,882 18,430 33,019 $ 50,701 $133,333
William S. Thomas, Jr 19,600 361,964 96,000 40,246 1,802,223 392,693
D. Vernon Horton 0 -- 32,001 10,000 578,898 5,370
Clayton C. Larson 0 -- 32,001 10,000 578,898 5,370
David A. Abts 13,307 171,548 19,918 17,000 212,181 161,612
</TABLE>
(1) Value realized from options exercised during Fiscal Year 1999 and the value
of unexercised in-the-money options are calculated by determining the
difference between the estimated fair market value of the stock underlying
the options, based on reported third-party transactions ($30.75 per share
at year-end), and the exercise price of the options as of the exercise date
or as of year-end, as applicable.
20
<PAGE> 25
PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total
returns for our common stock, the Standard & Poor's 500 Stock Index and SNL
Banks (Western) Index, each of which assumes an initial value of $100 and
reinvestment of dividends.
<TABLE>
<CAPTION>
PERIOD ENDING
---------------------------------------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
INDEX 1994 1995 1996 1997 1998 1999
----- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Pacific Capital Bancorp.... 100.00 122.49 177.40 306.08 342.24 419.38
S&P 500.................... 100.00 137.58 169.03 225.44 289.79 350.50
SNL Western Bank Index..... 100.00 167.70 238.42 351.46 360.12 372.18
</TABLE>
21
<PAGE> 26
REPORT OF THE GOVERNANCE AND COMPENSATION COMMITTEE
The report of the Governance and Compensation Committee for the 1999
calendar year includes activities associated with compensation review and
recommendations for the Named Officers of the Company.
The Corporate Governance and Compensation Committee is composed of
independent, outside directors. The Committee also meets at the end of each year
to review that year's performances of Pacific Capital Bancorp's chief executive
and other executive officers, including the Named Officers in the Summary
Compensation Table. The Committee makes recommendations to the Board of
Directors on executive salaries for the ensuing year and bonuses for the past
year. The Committee met in January, 2000 to make its compensation
recommendations for calendar year 2000, and to recommend bonuses for the
Company's executive officers, based on performance in 1999.
COMPENSATION PHILOSOPHY
The function of this Committee is to ensure that senior executive
officers are compensated in a manner consistent with the Company's stated
compensation strategy, internal equity considerations, competitive practice, and
the requirements of the appropriate regulatory bodies.
The Company's compensation program for executives consists of three key
elements:
- Base salary
- Performance-based annual bonus
- Periodic grants of stock options
The Committee believes that this three-part program best serves the
interests of the Company and its shareholders. This program allows us to be
competitive within the industry, ensures retention of our high quality executive
officers, and maintains a "team approach" to management. At the same time, it
advances both the short and long-term interests of shareholders.
BASE SALARY
In determining base salary levels of the chief executive officer and
other executive officers, the committee took into consideration compensation
levels of peer group companies, using such references as the State Department of
Financial Institutions Executive Officer Compensation Survey, the Survey of
Executive Compensation of California Independent Banks, and other relevant
surveys prepared by industry consultants. Particular focus is on California
independent community banks.
ANNUAL BONUS
The bonus permits annual recognition of individual performance. The
Committee based its bonus recommendations on:
- - specific performance as matched against individual goals;
- - the Company's overall performance for the period in question as measured by
its profitability and its capital levels;
- - the Company's performance relative to the industry in terms of returns on
assets and equity;
- - the Company's problem asset levels, its loan production, the quality of its
asset liability management, and its regulatory compliance; and
- - the overall capitalization level.
The Committee also considers the Company's performance and executive
officers' bonuses paid over the last three years in determining bonus and
compensation levels. Because the merger occurred on December 30, 1998, only
Santa Barbara Bancorp was used in the previous two years' data. In 1997, net
income for Santa Barbara Bancorp was $20,136,000.00 or $1.33 per share.
Executive officers' bonuses were $805,000.00, all of which was paid in 1998. In
1998, net income for Santa Barbara Bancorp was $24,379,000.00 or $1.56 per
share. Executive officers' bonuses were $970,000.00, all of which was paid in
1999. In 1999, net income for Pacific Capital Bancorp was $44,274,000, or $1.79
per share. Executive officers' bonuses were $1,360,000, all of which was paid
in year 2000.
22
<PAGE> 27
STOCK OPTIONS
The final component of executive compensation is stock options, which
are granted periodically to members of the executive group. Stock options are
used primarily to provide longer-range incentives to the executives to ensure
long-term commitment. The Corporate Governance and Compensation Committee
approves grants of stock options and acts as the stock option committee for our
stock option plans.
Pacific Capital Bancorp
Governance and Compensation Committee
Edward E. Birch, Chairman
Dale E. Hanst
Roger C. Knopf
Kathy J. Odell
OTHER INFORMATION
- --------------------------------------------------------------------------------
CERTAIN TRANSACTIONS.
Some of our directors and the companies that they are associated with are
our customers, and we expect to have banking transactions with them in the
future. In our opinion, all loans and commitments to lend were made in the
ordinary course of our business and were in compliance with applicable laws.
Terms, including interest rates and collateral, were substantially the same as
those prevailing for comparable transactions with other persons of similar
creditworthiness.
In our opinion, these transactions did not involve more than a normal risk
of collectability or present other unfavorable features. The aggregate amount of
all such loans and credit extensions outstanding as of December 31, 1999, to all
directors and executive officers (including their associates and members of
their immediate family) was approximately $8,940,146. We have a very strong
policy regarding review of the adequacy and fairness of the banks' loans to its
directors and officers.
Donald M. Anderson, Chairman of our Board of Directors, is the general
partner of Pueblo Associates, a limited partnership. We leased space from Pueblo
Associates at 1021 Anacapa Street, Santa Barbara, California for our executive
headquarters and for administrative functions of Santa Barbara Bank & Trust. The
lease, covering 28,957 square feet of space, was restated in 1994 for a
five-year term with four five-year options to renew. On February 20, 1999, the
building was substantially destroyed by fire.
We have signed a letter of intent with Pueblo Associates to rebuild and
re-lease the building and a new lease is currently being drafted. Occupancy is
anticipated on May 1, 2001. The Board of Directors, based on the opinion of
independent consultants, has determined that the proposed lease is fair to the
Company and constitutes an arms-length transaction. Lease payments totaled
$41,698 during 1999 up to the date of the fire.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
The rules of the Securities Exchange Act of 1934, as amended, require that
we disclose late filings of reports of stock ownership (and changes in stock
ownership) by our directors and executive officers. Based on review of copies of
reports furnished to us and written representations that no other reports were
required during the fiscal year ended December 31, 1999, all Section 16(a)
filing requirements applicable to officers, directors and greater than
ten-percent beneficial owners were timely filed, with the exception of amended
Form 4 reports filed for D. Vernon Horton, William H. Pope and Cathy Steinke in
2000 to correct their beneficial holdings.
SUBMISSION OF SHAREHOLDER PROPOSALS
To be included in next year's proxy statement, shareholder proposals must
be submitted in writing no earlier than January 18, 2001, and generally no later
than February 16, 2001. Our Bylaws contain specific procedural requirements
regarding a shareholder's ability to nominate a director or submit a proposal to
be considered at a meeting of shareholders. If you would like a copy of the
procedures contained in our bylaws, please contact: Pacific Capital Bancorp,
P.O. Box 1119, Santa Barbara, California 93102, Attention: Carol Kelleher,
Assistant Corporate Secretary. No shareholder proposals were submitted for the
2000 Annual Meeting.
23
<PAGE> 28
SOLICITATION EXPENSES
The Company is paying for distributing and soliciting proxies. As part of
this process, we reimburse brokers, nominees, fiduciaries and other custodians
reasonable fees and expenses in forwarding proxy materials to shareholders.
Employees do not receive additional compensation for soliciting proxies.
DIRECTOR NOMINATIONS
The Governance and Compensation Committee does not consider shareholder
nominations for director's positions. However, our By-laws do provide procedures
for nominating directors. Nominations may be made by the Board of Directors or
by any shareholder who holds stock in the Company and is entitled to vote. At
annual meetings and special meetings of the shareholders called by the Board,
nominations (other than those approved by our Board), should be made in writing
and mailed to Pacific Capital Bancorp, P.O. Box 1119, Santa Barbara, California,
93102-1119, Attention: Jay D. Smith, Corporate Secretary.
A written statement from the nominee is required consenting to serve as
director if elected. Nominations must include the nominee's name, address,
shares, and principal occupations along with the name, address and number of
shares owned by the nominating shareholder.
FINANCIAL MATERIALS
Shareholders may request free copies of our financial materials (annual
report, 10-K and proxy statement) from Pacific Capital Bancorp, P.O. Box 1119,
Santa Barbara, California 93102, Attention: Carol Kelleher, Assistant Corporate
Secretary. Our financial materials can also be found on our website at
www.pcbancorp.com.
24
<PAGE> 29
EXHIBIT A
DESCRIPTION OF THE 1996 DIRECTORS STOCK OPTION PLAN
The following discussion summarizes the significant features of the
Directors Plan, as amended and proposed for shareholder approval.
o Administration of the Directors Plan
The Directors Plan may be administered by either the Board of Directors
or a Committee of the Board, consisting of not less than two Non-Employee
Directors who do not receive compensation from the Company other than for
services performed as a Director. (The entity administering the Directors Plan
is referred to as the "Administrator".) The Administrator has full authority to:
- construe and implement the Directors Plan;
- select the individuals who will be eligible for awards under the
Directors Plan;
- determine the number of shares covered by any award and the option
price or purchase price of any award;
- impose restrictions on the transferability of shares acquired under
the Directors Plan; and
- prescribe all other terms and conditions of each award granted under
the Directors Plan.
o Eligibility
The Administrator may grant awards only to Directors who are not
employees of the Company or a subsidiary of the Company. No Directors who are
eligible to receive awards under the Restricted Plan are entitled to receive the
grant of an award under the Directors Plan.
o Share Reserve
The Directors Plan authorizes a total of 300,000 shares of the Company's
common stock. As of the date of this Proxy Statement, 20,100 shares remain
available for issuance under the Directors. If this Proposal is approved, there
will be an additional 250,000 shares of common stock available for issuance. The
Directors Plan provides that the foregoing number of shares will be adjusted
from time to time to reflect any stock splits, stock dividends, reverse stock
splits, combinations, reclassifications and similar changes in the Company's
common stock which occur hereafter.
o Types of Awards
The Directors Plan permits both the grant of stock options and the award
of shares of common stock ("restricted stock"). The options that may be granted
are non-qualified stock options. The Administrator determines the number of
shares covered by any award and the terms and conditions of any award.
o Grant and Exercise of Option
Options granted under the Directors Plan may only be non-qualified stock
options for federal and state tax purposes. The terms of any options granted
are:
- The number of shares of common stock covered by the option is
determined by the Administrator as of the grant date of the option.
- The Administrator sets the exercise price of the option at the time
of grant. The exercise price may not be less than 100% of the fair
market value of common stock as of the grant date.
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<PAGE> 30
- The optionee may pay the option exercise price in cash or through
the surrender of shares of common stock of the Company (valued at
its then fair market value).
- The maximum term of any option is five years.
- Options generally become exercisable ("vest") six months after the
grant date.
- All options immediately vest upon the occurrence of a change in
control. A change of control generally includes only the acquisition
by a third person who is not an affiliate of the Company of 35% or
more of our outstanding voting stock.
- An option terminates on the termination of the optionee's status as
a Director of the Company for any reason. If the termination is
other than for cause or by reason of the optionee's death or
disability, the option must be exercised within three months after
the retirement date. If the termination is a result of the
optionee's death or disability, the option must be exercised within
twelve months after the termination date. If the termination is for
cause, the option terminates simultaneously with the termination of
the optionee's status as a Director.
- Generally, options are not transferable, except in the event of the
optionee's death, and may be exercised only within the period
prescribed by the Administrator. The Administrator may provide that
a non-qualified stock option may be transferred by the optionee to:
- the optionee's spouse, parents and lineal descendants, including
adopted children;
- a trust, partnership or limited liability company established by
the optionee for the optionee and/or members of his immediate
family;
- tax-exempt educational, religious or charitable organizations;
and
- other persons and entities as the Administrator may specifically
approve.
o Reload Features of Options
The Directors Plan provides for the issuance of "reload" options, which
are designed to encourage "stock-for-stock" exercises of options. In a
stock-for-stock exercise, the optionee pays the purchase price by delivering
shares of Company stock owned rather than paying cash for the purchase price of
the option. The advantage for the optionee is that an expenditure of cash is not
necessary at the time of exercise, but it does dilute the optionee's stock
ownership position. The "reload" features are designed to replenish this
dilution. A reload option is granted to any optionee who exercises an option by
tendering shares of common stock. The reload options will be on the following
terms:
- The number of shares covered by the reload option will be equal to
the number of shares tendered in the stock-for-stock exercise;
- The exercise price of the reload option will be equal to the then
fair market value of the Company's common stock;
- The exercise period of the reload option will be equal to the
remaining term of the underlying option, or five years, whichever is
greater; and
- The other terms of the reload option will be the same as those of
the underlying option.
The reload options will be subject to the following restrictions, which
are designed to prevent abuse of the reload options:
- A reload option will be granted only if the shares of common stock
tendered on exercise of the underlying option were held by the
optionee for at least six months prior to the exercise of the
underlying option;
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<PAGE> 31
- If the shares issued on exercise of the underlying option are sold
or transferred prior to one year following exercise of the option,
the reload option terminates; and
- The reload option may not be exercised for one year following its
grant.
o Issuance of Restricted Stock
The terms of any shares of restricted stock or other stock incentives
issued under the Directors Plan generally will be as follows:
- The Administrator shall determine:
- directors who will be awarded restricted stock;
- the purchase price, if any, payable for the restricted stock;
- the period over which the director's interest in the restricted
stock shall vest; and
- other terms and conditions consistent with this Plan, applicable
to the award of the restricted stock.
- The Administrator may designate whether any grant of restricted
stock is intended to be "performance-based compensation" as that
term is used in Section 162(m) of the Code.
- The director may not sell or transfer any of the restricted stock
prior to six months after the date of the award.
- The Company shall have the right to repurchase the unvested
restricted stock upon the termination of the director's status as a
director at a price equal to the purchase price paid by the
director.
- The Company may have the right to repurchase the vested restricted
stock upon the termination of the director's status as a director at
a price equal to the then fair market value of the common stock.
- The director's interest in any restricted stock shall immediately
vest upon the occurrence of a change in control. For purposes of the
Directors Plan, a change of control generally includes only the
acquisition by a third person who is not an affiliate of the Company
of 35% or more of the outstanding voting stock of the Company.
o Restrictions on Stock Issued Under the Directors Plan
The Administrator may impose restrictions on the transferability of any
shares of common stock issued pursuant to awards under the Directors Plan. The
Administrator is not required to impose any such restrictions.
27
<PAGE> 32
o Amendment and Termination of the Directors Plan
The Board of Directors may amend, modify or terminate the Directors Plan
at any time without notice to or approval of the shareholders, provided that no
outstanding option or restricted stock award is adversely affected. Approval is
required only when applicable law requires approval. The Directors Plan will
terminate on December 31, 2005, unless the Board of Directors has previously
terminated it. Options and restricted stock awards granted before the
termination of the Directors Plan may be exercised and will vest thereafter in
accordance with the terms of the applicable agreement.
o Federal Income Tax Consequences
The types of awards that may be granted under the Directors Plan are the
same as those that may be granted under the Restricted Plan, except that options
granted under the Directors Plan may only be non-qualified stock options. As the
types of stock awards that may be granted under the Directors Plan are the same
as those that may be granted under the Restricted Plan, the federal income tax
consequences are the same as those described on page 32 of this Proxy Statement.
o Existing Option Grants
The Named Officers identified elsewhere in this Proxy Statement are not
eligible to receive option grants or restricted stock awards under the Directors
Plan.
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<PAGE> 33
EXHIBIT B
DESCRIPTION OF THE RESTRICTED STOCK OPTION PLAN
The following discussion summarizes the significant features of the
Restricted Plan, as amended and proposed for shareholder approval.
o Administration of the Restricted Plan
The Restricted Plan may be administered by either the Board of Directors
or a Committee of the Board consisting of not less than three members of the
Board who do not participate in the Restricted Plan. (The entity administering
the Restricted Plan is referred to as the "Administrator".) The Administrator
has full authority to:
- construe and implement the Restricted Plan;
- select the individuals who will be eligible for awards;
- determine the number of shares covered by any award and the option
price or purchase price of any award;
- impose restrictions on the transferability of shares acquired under
the Restricted Plan; and
- prescribe all other terms and conditions of each award granted under
the Restricted Plan.
o Eligibility
The Administrator may grant awards to key employees of the Company or a
subsidiary of the Company, including officers and directors who are also
employees. The selection of particular employees who will receive awards is at
the discretion of the Administrator. Eligibility is limited to full-time
salaried employees who, in the judgment of the Administrator, are qualified by
position, training or ability to contribute substantially to the progress of the
Company. No employees have any vested rights in the Restricted Plan nor are any
employees entitled to receive any award grant unless the Administrator, in its
sole discretion, approves the grant.
Nonemployee directors are not eligible to participate in the Restricted
Plan, nor are persons who own stock possessing more than 10% of the total
combined voting rights or value of all classes of stock outstanding.
o Share Reserve
The Restricted Plan authorizes 2,600,000 shares of common stock. As of
the date of this Proxy Statement, 78,770 shares remain available for issuance.
If this Proposal is approved, an additional 750,000 shares of common stock will
be available for issuance. The Restricted Plan provides that the foregoing
number of shares will be adjusted from time to time to reflect any stock splits,
stock dividends, reverse stock splits, combinations, reclassifications and
similar changes in the Company's common stock which occur hereafter.
o Types of Awards
The Restricted Plan permits both the grant of stock options and the
award of shares of common stock ("restricted stock"). The Administrator
determines the number of shares covered by any award and the terms and
conditions of any award.
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<PAGE> 34
o Grant and Exercise of Option
Options granted under the Restricted Plan may be incentive stock options
or non-qualified stock options for federal and state tax purposes. The terms of
any options granted under the Restricted Plan generally will be as follows:
- The number of shares of common stock covered by the option is
determined by the Administrator as of the grant date of the option.
- The exercise price of the option is set by the Administrator at the
time of grant. The exercise price may not be less than 100% of the
fair market value of common stock as of the date of grant.
- The optionee may pay the exercise price of an option in cash or
through the surrender of shares of common stock of the Company
(valued at its then fair market value).
- The maximum term of any incentive option is five years. The maximum
term for any non-qualified option is ten years.
- Options generally become exercisable ("vest") at the rate of 20% per
year of employment following grant of the options. The Administrator
may establish other vesting schedules as it deems appropriate in
specific cases, so long as the vesting is no longer than a five-year
period. Options may not vest prior to six months after the grant
date of the option.
- All options shall immediately vest upon the occurrence of a change
in control. For purposes of the Restricted Plan, a change of control
generally includes only the acquisition by a third person who is not
an affiliate of the Company of 35% or more of the outstanding voting
stock of the Company.
- An option terminates on the termination of the optionee's employment
with the Company for any reason. If the termination is other than as
a result of the optionee's retirement, death or disability, the
option must be exercised within 30 days following the termination of
employment. If the termination is by reason of the optionee's
retirement, the option must be exercised within three months after
the date of retirement. If the termination is a result of the
optionee's death or disability, the option must be exercised within
twelve months after the date of termination.
- Generally options are not transferable, except in the event of the
optionee's death, and may be exercised only by the optionee during
his or her lifetime. The Administrator may provide that a
non-qualified stock option may be transferred by the optionee to any
of the following persons:
- the optionee's spouse, parents and lineal descendants,
including adopted children;
- a trust, partnership or limited liability company established
by the optionee for the optionee and/or members of his
immediate family;
- tax-exempt educational, religious or charitable organizations;
and
- such other persons and entities as the Administrator may
specifically approve.
o Reload Features of Options
The Restricted Plan provides for the issuance of "reload" options, which
are designed to encourage "stock-for-stock" exercises of options. In a
stock-for-stock exercise, the optionee pays the purchase price by delivering
shares of Company stock owned rather than paying cash for the purchase price of
the option. The advantage for the optionee is that an expenditure of cash is not
necessary at the time of exercise; however, it also dilutes the optionee's stock
ownership position. The "reload" features are designed to replenish this
dilution. A reload option will be granted to any optionee who exercises an
option by tendering shares of common stock. The reload options will be on the
following terms:
30
<PAGE> 35
- The number of shares covered by the reload option will be equal to
the number of shares tendered in the stock-for-stock exercise;
- The exercise price of the reload option will be equal to the then
fair market value of the Company's common stock;
- The exercise period of the reload option will be equal to the
remaining term of the underlying option, or five years, whichever is
greater; and
- The other terms of the reload option will be the same as those of
the underlying option.
The reload options will be subject to the following restrictions, which
are designed to prevent abuse of the reload options:
- A reload option will be granted only if the shares of common stock
tendered on exercise of the underlying option were held by the
optionee for a period of at least six months prior to the exercise
of the underlying option;
- If the shares issued on exercise of the underlying option are sold
or transferred prior to one year following exercise of the option,
the reload option terminates; and
- The reload option may not be exercised for one year following its
grant.
o Issuance of Restricted Stock
The terms of any shares of restricted stock or other stock incentives
issued under the Restricted Plan generally will be as follows:
- The Administrator shall determine:
- employees to be awarded restricted stock;
- the purchase price, if any, payable for the restricted stock;
- the period over which the employee's interest in the restricted
stock shall vest; provided that such period shall not be longer
than five years and at least 20% of the interest shall vest on
each anniversary of the date of issuance of the restricted
stock; and
- the other terms and conditions consistent with this Plan
applicable to the award of the restricted stock.
- The Administrator may designate whether any grant of restricted
stock is intended to be "performance-based compensation" as that
term is used in Section 162(m) of the Code.
- The employee may not sell or transfer any of the restricted stock
prior to six months after the date of the award of the restricted
stock.
- The Company shall have the right to repurchase the unvested
restricted stock upon the termination of the employee's employment
with the Company at a price equal to the purchase price paid by the
employee.
- The Company may have the right to repurchase the vested restricted
stock upon the termination of the employee's employment with the
Company at a price equal to the then fair market value of the common
stock.
31
<PAGE> 36
- The employee's interest in any restricted stock shall immediately
vest upon the occurrence of a change in control. For purposes of the
Restricted Plan, a change of control generally includes only the
acquisition by a third person who is not an affiliate of the Company
of 35% or more of the outstanding voting stock of the Company.
o Restrictions on Stock Issued Under the Restricted Plan
The Administrator may impose restrictions on the transferability of any
shares of common stock issued pursuant to awards under the Restricted Plan. The
Administrator is not required to impose any such restrictions.
o Amendment and Termination of the Restricted Plan
The Board of Directors may amend, modify or terminate the Restricted
Plan at any time without notice to or approval of the stockholders, provided
that no outstanding option or restricted stock award is adversely affected.
Approval is required only when applicable law requires approval. The Restricted
Plan will terminate on January 29, 2002, unless the Board of Directors has
previously terminated it. Options and restricted stock awards granted before the
termination of the Restricted Plan may be exercised and will vest thereafter in
accordance with the terms of the applicable agreement.
o Federal Income Tax Consequences
- Non-Qualified Stock Options
No taxable income results to an employee from the grant of a
non-qualified option, nor is the Company entitled to a deduction.
The exercise of a non-qualified option generally results in a taxable
event. An individual who purchases shares by exercising a non-qualified option
generally will realize ordinary income in the year of the exercise. The amount
of this income is equal to (i) the fair market value of the shares of common
stock on the date of exercise of the option, minus (ii) the option exercise
price. Where the stock issued upon exercise of the options is subject to both a
substantial risk of forfeiture and a restriction on transfer, the participant
will realize income only upon the lapse of such risk of forfeiture or the
expiration of these restrictions. The amount of this income will be equal (a) to
the fair market value of the shares of common stock on the date of lapse of the
risk of forfeiture or restrictions, minus (b) the option exercise price.
Alternatively, the participant may make an election under Section 83(b) of the
Internal Revenue Code to be taxed upon exercise of the option, as though such
risk of forfeiture or restrictions did not exist. In either case, the Company is
entitled to a corresponding deduction in an amount equal to any ordinary income
realized by the employee.
Upon the disposition of stock acquired upon exercise of a non-qualified
option, any gain or loss will be taxed as a capital gain or loss. This gain
would be treated as a short- or long-term capital gain (or loss), depending upon
how long the optionee has held the stock after the exercise of the option.
- Incentive Stock Options
Neither the optionee nor the Company incurs any tax consequence as the
result of the grant of an incentive stock option ("ISO"). Likewise, the optionee
has no taxable income upon exercising an ISO (subject to the alternative minimum
tax rules discussed below), and the Company receives no deduction at that time.
Generally any gain realized by the optionee upon the disposition of stock
acquired upon exercise of an ISO would be taxed as a capital gain. The Company
is not entitled to any deduction under these circumstances.
If the optionee sells the shares acquired on exercise of the ISO prior
to either two years after the date of grant of the ISO or one year after the
date of exercise of the ISO, the optionee will be taxed on the difference
between the sales price and the option exercise price. This gain is taxed as
ordinary income to the extent of the difference between the exercise price and
the fair market value of the stock on the date of exercise of the ISO, with any
balance taxed as capital gains. In these circumstances, the Company is entitled
to a deduction equal to the amount of ordinary income realized by the optionee.
32
<PAGE> 37
- Alternative Minimum Tax
The "spread" under an ISO, (i.e., the difference between the fair market
value of the shares at exercise and the exercise price) is treated as an
adjustment to taxable income for alternative minimum tax ("AMT") purposes for
the year of exercise. The optionee's alternative minimum taxable income is
increased by the amount of the spread, potentially subjecting the holder to the
AMT. This ISO AMT adjustment would be eliminated by a disqualifying disposition
of the ISO shares, provided the disposition occurs in the taxable year in which
the ISO is exercised. The AMT does not affect the tax consequences of the
Restricted Plan to the Company.
- Issuance of Restricted Stock
The employee will have to report taxable income with respect to the
restricted stock, either upon issuance or upon the lapse of any restrictions on
transfer or risk of forfeiture. If the restricted stock is subject to both a
risk of forfeiture and a restriction on transfer, the employee will have to
report the taxable income on the date on which such risk or restriction lapses,
unless the employee elects (under Section 83(b) of the Internal Revenue Code),
to report such income in the year in which the restricted stock is issued. If
the restricted stock is not subject to both a risk of forfeiture and a
restriction on transfer, the employee will have to report the taxable income on
the date on which the restricted stock is issued. The amount of taxable income
that the employee will have to report will be equal to the difference between
the fair market value of the stock on the date of issuance or of the lapse of
the risk or restriction, as appropriate, and the amount that the employee paid
for the restricted stock. The Company will be entitled to a deduction equal to
the amount of taxable income reported by the employee.
Any gain realized by the employee on his or her subsequent sale or
transfer of the restricted stock will be taxed as long-term or short-term
capital gain, depending on the period that the employee has held the restricted
stock. The Company will not be entitled to any deduction as a result of the
employee's subsequent sale of the restricted stock.
o Existing Option Awards
The Named Officers identified elsewhere in this Proxy Statement are
eligible to receive the grant of options or the award of restricted stock under
the Restricted Plan. The options that have previously been granted to these
persons are identified in the Compensation Table. The Company has no present
plans to grant options or to award restricted stock covering any particular
number of shares of common stock to these persons.
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<PAGE> 38
[PACIFIC CAPITAL BANCORP LOGO]
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2000
2:00 P.M.
LOBERO THEATRE
33 E. CANON PERDIDO
SANTA BARBARA, CALIFORNIA
- --------------------------------------------------------------------------------
[PACIFIC CAPITAL BANCORP LOGO] PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT THE
ANNUAL MEETING ON APRIL 25, 2000.
By signing this proxy, you revoke all prior proxies and appoint Donald M.
Anderson, David W. Spainhour and Jay D. Smith, and each of them, as Proxy
Holders, each with the power to act separately and to appoint his substitute,
and hereby authorize them to represent and to vote, as designated on the reverse
side, all the shares of common stock of Pacific Capital Bancorp held of record
by the undersigned on March 2, 2000, on the matters shown on the reverse side
and any other matters which may come before the Annual Meeting and all
adjournments.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE OR VOTE BY PHONE (SEE INSTRUCTIONS ON REVERSE SIDE).
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 39
THERE ARE TWO WAYS TO VOTE YOUR PROXY
COMPANY #
CONTROL #
Your telephone vote authorizes the proxies named on this proxy card to vote your
shares in the same manner as if you marked, signed, and returned your proxy
card.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY *** IMMEDIATE
- - Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. on April 24, 2000.
- - You will be prompted to enter your 3-digit Company Number and your
7-digit Control Number which are located above.
- - Follow the simple instructions the Voice provides you.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we have provided.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3 AND 4.
<TABLE>
<S> <C> <C> <C>
1. Election of directors: 01 Donald M. Anderson 05 D. Vernon Horton 09 Kathy J. Odell
02 Edward E. Birch 06 Roger C. Knopf 10 William H. Pope
03 Richard M. Davis 07 Clayton C. Larson 11 David W. Spainhour
04 Dale E. Hanst 08 Richard A. Nightingale 12 William S. Thomas, Jr.
</TABLE>
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(except as marked)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE,
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) [ ]
PLEASE FOLD HERE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
2. Approval to increase the number of shares
allocated to the 1996 Directors' Stock
Option Plan and to approve the other
amendments to the plan. [ ] For [ ] Against [ ] Abstain
3. Approval to increase the number of shares
allocated to the Restricted Stock Option
Plan and to approve the other amendments
to the plan. [ ] For [ ] Against [ ] Abstain
4. Ratify selection of Arthur Andersen, LLP
to serve as independent certified public
accountants for the 2000 calendar year. [ ] For [ ] Against [ ] Abstain
5. Other Business. In their discretion, the
proxy holders are authorized to vote upon
such other business as may properly come
before the meeting.
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below:
Date
--------------------------------------------
Please date this Proxy and sign exactly as the
name appears on this card. When shares are held
by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee,
or guardian, please give full title as such. If
a corporation, please sign in full corporate
name by President or other authorized officer.
If a partnership, please sign in partnership
name by authorized person.
