UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
___ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ____________
Commission File No.: 0-11113
Full Title of the Plan and Address of the Plan:
PACIFIC CAPITAL BANCORP
Incentive & Investment and Salary Savings Plan
200 E. Carrillo Street, Suite 300
Santa Barbara, California 93101
(Address of principal executive offices)
Name of the Issuer of the securities held pursuant to the plan and the
address of the principal executive office:
PACIFIC CAPITAL BANCORP
200 E. Carrillo Street, Suite 300
Santa Barbara, California 93101
(Address of principal executive offices)
<PAGE>
PACIFIC CAPITAL BANCORP
INCENTIVE & INVESTMENT AND SALARY SAVINGS PLAN
DECEMBER 31, 1999 AND 1998
INDEX
FINANCIAL STATEMENTS
Report of Independent Accountants
Statements of Net Assets Available for Plan Benefits as of
December 31, 1999 and 1998
Statement of Changes in Net Assets Available for Plan Benefits for the
year ended December 31, 1999
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTAL SCHEDULE
Item 27a - Schedule of Assets Held for Investment as of December 31, 1999
SIGNATURE
EXHIBIT
23 - Consent of Independent Accountants
<PAGE>
Report of Independent Accountants
To the Participants and Administrator
of the Pacific Capital Bancorp Incentive & Investment and Salary Savings Plan
In our opinion, the accompanying statement of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of the Pacific Capital Bancorp Incentive & Investment and Salary
Savings Plan (the "Plan") at December 31, 1999 and 1998, and the changes in
net assets available for benefits for the year ended December 31, 1999 in
conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements
in accordance with auditing standards generally accepted in the United States
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at end of year is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
As discussed in Note 9, effective January 1, 1999 the Plan was merged with
the Pacific Capital Bancorp 401(k) Profit Sharing Plan.
/s/PricewaterhouseCoopers LLP
June 12, 2000
<PAGE>
PACIFIC CAPITAL BANCORP
INCENTIVE & INVESTMENT AND SALARY SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31,
1999 1998
Assets
Investments, at fair value $44,139,930 $34,224,611
Receivables:
Employer contributions - 231,876
Interest and dividends -
468,055
Participant notes 1,644,155 1,429,320
------------- --------------
1,644,155 2,129,251
------------- --------------
Net assets available for benefits $45,784,085 $36,353,862
------------- --------------
------------- --------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PACIFIC CAPITAL BANCORP
INCENTIVE & INVESTMENT AND SALARY SAVINGS PLAN
Statement of Changes in Net Assets Available for
Benefits
Year ended
December 31,
1999
Additions to net assets attributed to:
Investment income:
Interest $ 228,630
Dividends 25,057
Net appreciation in fair value of investments 7,314,786
-------------
-------------
7,568,473
-------------
Contributions:
Employer 1,383,566
Employee 2,754,741
-------------
4,138,307
-------------
Total additions 11,706,780
Deductions from net assets attributed to:
Benefit payments 6,193,259
Transaction charge 15,710
Participant notes receivable terminated
due to withdrawal of participant 159,931
-------------
Total deductions 6,368,900
Change in forfeiture reserve, net (191,581)
-------------
Net increase prior to plan merger 5,146,299
Transfer of assets due to plan merger 4,283,924
-------------
Net increase 9,430,223
Net assets available for benefits at beginning of year 36,353,862
-------------
Net assets available for benefits at end of year $45,784,085
-------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PACIFIC CAPITAL BANCORP
INCENTIVE & INVESTMENT AND SALARY SAVINGS PLAN
Notes to Financial Statements
1. Description of Plan
The following description of the Pacific Capital Bancorp Incentive &
Investment and Salary Savings Plan (the "Plan") provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
General
The Plan is a defined contribution plan established effective January 1,
1966 and restated in its entirety effective January 1, 1998. Employees of
Pacific Capital Bancorp (the "Company") become eligible to make deferred
compensation contributions to the Plan after completing 90 days of
employment and attaining the age 18 during the Plan year in which 1,000 or
more hours are worked. Employees become eligible to receive an allocation
of the Company's discretionary non-elective contribution after completing
one year of service during which 1,000 or more hours are worked. The Plan
is subject to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
Contributions
Participants may contribute an amount up to 10 percent of their
compensation for the contribution period. Participants direct the
investment of their contributions into various investment options offered
by the Plan. The Plan currently offers a general account, 18 pooled
separate accounts, a Company stock and a self-directed account as
investment options for participants. The self-directed account is comprised
of assets invested at the direction of individual Plan participants.
Employee contributions are recorded in the period during which the Company
makes payroll deductions from the participant's earnings.
The Company will make a matching contribution in an amount equal to $1.00
for each $1.00 contributed by a participant, up to a maximum of 3 percent
of the participant's compensation. The Company will also make a matching
contribution in an amount equal to $.50 for each $1.00 of the next 3
percent of the participant's compensation, but not to exceed 4.5 percent of
the participant's total compensation. The Company may also make
discretionary non-elective contributions. Matching Company contributions
are recorded in the same period as employee contributions. Discretionary
non-elective contributions, if any, are recorded when approved and funded.
Participant Accounts
Each participant's account is credited with the participant's contribution
and allocation of the Company's discretionary non-elective contribution and
plan earnings. Allocations of contributions are based on participant's
election. Allocations of plan earnings for investments other than
self-directed accounts are based on participants' account balances.
Self-directed accounts are credited with the earnings of the specific
investment chosen by the participant. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's vested
account.
<PAGE>
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching contributions is based
on years of service. A participant becomes vested in the Company's matching
contributions as follows: 20 percent vested after one year of service, 40
percent after two years of service, 60 percent after three years of
service, 80 percent after four years of service and 100 percent vested
after five years of service.
A participant becomes vested in the Company's discretionary non-elective
contributions as follows: 20 percent vested after two years of service, 30
percent vested after three years of service, 40 percent vested after four
years of service, 60 percent vested after five years of service, 80 percent
vested after six years of service and 100 percent vested after seven years
of service. However, if an active participant dies prior to attaining the
normal retirement age, the participant's account becomes 100 percent
vested.
Participants of the former Citizens Plan, which was merged into the Plan
effective October 1, 1997, were 100 percent vested in Company matching
contributions. They become vested in the Company's discretionary
non-elective contributions as follows: 33.33 percent vested after one year
of service, 66.67 percent vested after two years of service, and 100
percent vested after three years of service.
Participants of the former Pacific Capital Bancorp 401(k) Profit Sharing
Plan, which was merged into the Plan effective January 1, 1999 (Note 9),
become vested in all Company contributions as follows: 20 percent vested
after one year of service, 40 percent after two years of service, 60
percent after three years of service, 80 percent after four years of
service and 100 percent vested after five years of service.
Payment of Benefits
On termination of service, a participant may elect to receive either a
lump-sum amount equal to the value of the vested interest in his or her
account, or installment payments. Distributions are subject to the
applicable provisions of the Plan agreement. Benefit claims are recorded as
expenses when they have been approved for payment and paid by the Plan.
Participant Notes Receivable
A participant may borrow up to a maximum of $50,000 or 50 percent of the
vested portion of his or her account balance, whichever is less. Loans are
treated as a transfer to/from the investment fund from/to Participant Notes
Receivable. A loan is secured by the balance in the participant's account
and bears interest at a rate commensurate with market rates for similar
loans, as defined (5.00% to 12.00% for the year ended December 31, 1999).
<PAGE>
2. Summary of Accounting Policies
Method of Accounting
The Plan's financial statements are prepared on the accrual basis of
accounting. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and changes therein. Actual results could differ from those
estimates.
Amounts shown by investment fund option on the statement of net assets
available for benefits as of December 31, 1998 have been reclassified to be
shown in total to conform to the current year presentation in order to
adopt AICPA Statement of Position 99-3, "Accounting for and Reporting of
Certain Defined Contribution Plan Investments and Other Disclosure
Matters."
Investment Valuation
Investments in pooled separate accounts are recorded at fair value, as
determined by the unit value reported by Connecticut General Life Insurance
Company ("CG Life"). Investments in the general account are non-fully
benefit responsive and are recorded at fair value. Participant notes
receivable are valued at cost which approximates fair value. The Company
stock and investments held in the self-directed account are valued at their
quoted market price.
<PAGE>
3. Investments
Investments that represent 5 percent or more of the Plan's net assets are
separately identified below.
December 31,
1999
CIGNA Lifetime60 Fund $ 3,254,032
units, 276,234
CIGNA Lifetime50 Fund 2,621,038
units, 210,694
CIGNA Lifetime40 Fund 7,399,464
units, 573,158
CIGNA Lifetime30 Fund 7,981,169
units, 614,882
CIGNA Lifetime20 Fund 9,806,822
units, 731,307
<PAGE>
Investment Performance
During 1999, the Plan's investments (including interest and dividends and
gains and losses on investments bought and sold, as well as investments
held during the year) appreciated (depreciated) in value by $7,568,473, as
follows:
Year Ended
December 31,
1999
General Account:
CIGNA Charter Guaranteed Income Fund $ 66,672
Pooled Separate Accounts:
CIGNA Charter Actively Managed (Core) Fixed Income (773)
Fund
CIGNA Charter Corporate Bond Fund (589)
CIGNA Charter High Yield Bond Fund 6,559
CIGNA Charter Growth & Income Fund 53,406
CIGNA Charter Large Company Stock Index Fund 290,751
CIGNA Charter Large Company Stock Fund 2,275
CIGNA Charter Large Company Stock - Value I Fund 255,588
CIGNA Charter Large Company Stock - Growth Fund 477,733
CIGNA Charter Small Company Stock - Value I Fund 61,059
CIGNA Charter Small Company Stock - Growth Fund 329,349
CIGNA Charter Midsize Company Stock - Growth Fund 62,399
CIGNA Lifetime60 Fund 217,290
CIGNA Lifetime50 Fund 476,249
CIGNA Lifetime40 Fund 1,028,021
CIGNA Lifetime30 Fund 1,367,728
CIGNA Lifetime20 Fund 1,984,350
CIGNA Janus Worldwide Fund 330,869
CIGNA Lazard International Equity Fund 62,140
-------------
7,004,404
Common Stock:
Pacific Capital Bancorp Stock 333,524
CIGNA Direct Account (self-directed) 31,140
-------------
364,664
Participant Notes Receivable 132,733
-------------
Net increase $ 7,568,473
-------------
<PAGE>
4. Investment Contract with Insurance Company
The Plan participates in a contract with CG Life by means of investments in
the CIGNA Charter Guaranteed Income Fund. CG Life commingles the assets of
this investment with other assets. For the Plan's investment in the CIGNA
Charter Guaranteed Income Fund, the Plan is credited with interest at the
rates specified in the contract which ranged from 5.65% to 5.50% for the
year ended December 31, 1999, net of asset charges. CG Life prospectively
guaranteed the interest rates credited for six months. As discussed in Note
2, the CIGNA Charter Guaranteed Income Fund is included in the financial
statements at fair value which, principally because of the periodic rate
reset process, approximates contract value.
5. Related-Party Transactions
Plan assets include investments in funds managed by CG Life, a wholly owned
division of CIGNA. CIGNA is the Plan's trustee and as such, transactions
with the trustee qualify as party-in-interest transactions. Personnel and
facilities of the Company have been used to perform administrative
functions for the Plan at no charge to the Plan. In addition, the Plan
holds shares of Pacific Capital Bancorp, the Plan sponsor, which also
qualifies as a party-in-interest.
6. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
7. Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated September 21, 1992, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code ("IRC"). The Plan has been amended since receiving the determination
letter. However, the Plan's administrator and the tax counsel believe that
the Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
<PAGE>
8. Reconciliation of Plan Financial Statements to the Form 5500
Certain balances included on Schedule H (Part I and II) of the Annual
Return/Report of Employee Benefit Plan (the "Form 5500") have been
reclassified for purposes of presentation in these financial statements to
provide additional disclosure.
9. Plan Merger
Effective January 1, 1999, the former Pacific Capital Bancorp 401(k) Profit
Sharing Plan (the "Merged Plan") was merged into this Plan. Participant
accounts in the Merged Plan will be maintained under this Plan in
accordance with the Plan agreement.
10. Forfeitures
The net change in forfeiture reserve represents the net change in the
available forfeiture reserve balance from the prior year plus the current
year forfeitures generated. Forfeitures result from nonvested benefit
payments remaining in the Plan for terminated employees. When a terminated
employee's break-in-service exceeds the period defined in the Plan, the
generated forfeiture is added to the forfeiture reserve balance. The
forfeiture reserve of $3,002 at December 31, 1999 is available to offset
contributions which would be otherwise payable by the Company, in
accordance with the Plan agreement. In 1999 Company cash contributions were
offset by $199,021, from forfeited nonvested accounts.
<PAGE>
PACIFIC CAPITAL
BANCORP
INCENTIVE & INVESTMENT AND
SALARY SAVINGS PLAN
Item 27a
Schedule H (Part IV) form 5500
Schedule of Assets Held
for Investment Purposes at End
of Year December 31, 1999
(a) (b) (c) (d) (e)
Identity of Issue, Description of investment Cost Current
borrower, including value
lessor, or similar maturity date, rate of
party interest,
collateral, par or maturity
value
* Connecticut General CIGNA Charter Guaranteed N/A** $2,225,740
Life Income Fund
Insurance Company
* Connecticut General CIGNA Charter Actively Managed N/A** 136,282
Life (Core)
Insurance Company Fixed Income Fund
* Connecticut General CIGNA Charter Corporate Bond N/A** 62,081
Life Fund
Insurance Company
* Connecticut General CIGNA Charter High Yield Bond N/A** 47,017
Life Fund
Insurance Company
* Connecticut General CIGNA Charter Growth & Income N/A** 482,538
Life Fund
Insurance Company
* Connecticut General CIGNA Charter Large Company N/A** 1,713,668
Life Stock
Insurance Company Index Fund
* Connecticut General CIGNA Charter Large Company N/A** 21,706
Life Stock Fund
Insurance Company
* Connecticut General CIGNA Charter Large Company N/A** 1,480,176
Life Stock -
Insurance Company Value I Fund
* Connecticut General CIGNA Charter Large Company N/A** 1,908,430
Life Stock -
Insurance Company Growth Fund
* Connecticut General CIGNA Charter Small Company N/A** 363,828
Life Stock -
Insurance Company Value I Fund
* Connecticut General CIGNA Charter Small Company N/A** 1,045,004
Life Stock -
Insurance Company Growth Fund
* Indicates an identified person known to be a party-in-interest to the Plan.
** Cost information has been omitted for participant directed investments.
<PAGE>
(a) (b) (c) (d) (e)
Identity of Issue, Description of investment Cost Current
borrower, including value
lessor, or similar maturity date, rate of
party interest,
collateral, par or maturity
value
* Connecticut General CIGNA Charter Midsize Company N/A** $ 592,892
Life Stock -
Insurance Company Growth Fund
* Connecticut General CIGNA Lifetime60 Fund N/A** 3,254,032
Life
Insurance Company
* Connecticut General CIGNA Lifetime50 Fund N/A** 2,621,038
Life
Insurance Company
* Connecticut General CIGNA Lifetime40 Fund N/A** 7,399,464
Life
Insurance Company
* Connecticut General CIGNA Lifetime30 Fund N/A** 7,981,168
Life
Insurance Company
* Connecticut General CIGNA Lifetime20 Fund N/A** 9,806,822
Life
Insurance Company
* Connecticut General CIGNA Janus Worldwide Fund N/A** 1,088,589
Life
Insurance Company
* Connecticut General CIGNA Lazard International N/A** 265,865
Life Equity
Insurance Company Fund
* National Financial Pacific Capital Bancorp N/A** 1,354,939
Stock
Services Corporation
* Plan Participants Participant Notes Receivable N/A** 1,644,155
* Indicates an identified person known to be a party-in-interest to the Plan.
** Cost information has been omitted for participant directed investments.
<PAGE>
(a) (b) (c) (d) (e)
Identity of Issue, Description of investment Cost Current
borrower, including value
lessor, or similar party maturity date, rate of
interest,
collateral, par or maturity
value
Temporary Investments
* Connecticut General Life CIGNA Money Market Fund N/A** $ 58,489
Insurance Company
Equity Investments
* Connecticut General Life Freemont General Corporation N/A** 103,250
Insurance Company Common Stock
* Connecticut General Life Dell Computer Corporation N/A** 14,637
Insurance Company Common Stock
* Connecticut General Life Cisco Systems, Inc. N/A** 10,713
Insurance Company Common Stock
* Connecticut General Life Intel Corporation N/A** 8,231
Insurance Company Common Stock
* Connecticut General Life Microsoft Corporation N/A** 11,675
Insurance Company Common Stock
* Connecticut General Life Charles Schwab Corporation N/A** 24,518
Insurance Company Common Stock
* Connecticut General Life Celestial Asia Secs N/A** 5,450
Holdings, LTD
Insurance Company Common Stock
* Indicates an identified person known to be a party-in-interest to the Plan.
** Cost information has been omitted for participant directed investments.
<PAGE>
(a) (b) (c) (d) (e)
Identity of Issue, Description of investment Cost Current
borrower, including value
lessor, or similar party maturity date, rate of
interest,
collateral, par or maturity
value
Equity Investments
* Connecticut General Life Pacific Century Cyberworks, N/A** $ 22,000
LTD
Insurance Company Common Stock
* Connecticut General Life Amazon.Com, Inc. N/A** 7,613
Insurance Company Common Stock
* Connecticut General Life America Online, Inc. N/A** 15,175
Insurance Company Common Stock
* Connecticut General Life United Parcel Service, Inc. N/A** 6,900
Insurance Company Common Stock ----------
230,162
----------
Total Assets Held by CIGNA Representing the CIGNA $ 288,651
Direct Account
----------
* Indicates an identified person known to be a party-in-interest to the Plan.
** Cost information has been omitted for participant directed investments.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
PACIFIC CAPITAL BANCORP
Incentive & Investment and Salary Savings Plan
/s/ Donald Lafler
Donald Lafler June 29, 2000
Executive Vice President
Chief Financial Officer
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
EXHIBIT 23
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-40220) of Pacific Capital Bancorp of our report
dated June 12, 2000 relating to the financial statements of the Pacific Capital
Bancorp Incentive & Investment and Salary Savings Plan, which appears in this
Form 11-K.
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 27, 2000
