[RESTATED AS OF JANUARY 1, 2006] EXHIBIT 10.1
UMPQUA HOLDINGS CORPORATION
Supplemental Executive Retirement Plan
for
Xxxxxxx X. Xxxxx
THIS AGREEMENT is made and entered into effective as of July 1, 2003 by
and between Umpqua Holdings Corporation ("Umpqua"), and Xxxxxxx X. Xxxxx
(hereinafter referred to as "Participant").
R E C I T A L S
A. Participant is serving as the President and Chief Executive Officer
of Umpqua. The parties' desire that Participant will continue to render valuable
service to Umpqua in the future. This plan is intended to provide a financial
inducement to Participant for continued service, as well as a form of
compensation for doing so.
B. Umpqua and Participant entered into an Employment Agreement dated
effective as of July 1, 2003 ("Employment Agreement").
C. Pursuant to the Employment Agreement, Umpqua is obligated to provide
Participant with a supplemental executive retirement benefit on the terms and
conditions set forth in this Agreement.
ACCORDINGLY, the parties agree as follows:
ARTICLE 1
ADMINISTRATION
SECTION 1.1 PURPOSE OF THE PLAN. The purpose of the Plan is to provide
retirement benefits for Xxxxxxx X. Xxxxx.
SECTION 1.2 ADMINISTRATION OF THE PLAN. The Compensation Committee
shall appoint from time-to-time a person or persons to administer and interpret
the terms of the Plan and adopt rules and regulations to implement the Plan
("Administrator").
SECTION 1.3 TOP HAT PLAN AND EXCESS BENEFITS. The Plan is an unfunded
plan maintained primarily to provide deferred compensation benefits for a select
group of management or highly compensated participants (within the meaning of
sections 201(2), 301(a)(3), and 401(a)(1) of ERISA), and is intended to be
exempt from Parts 2, 3, and 4 of ERISA. The Plan also separately accounts for
benefits that are provided in excess of the limitations on contributions and
benefits imposed by section 415 of the Internal Revenue Code of 1986, as
described in section 3(36) of ERISA, and such separate part of the Plan is
intended to be an "excess benefit plan" exempt from ERISA pursuant to section
4(b)(5).
ARTICLE 2
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
SECTION 2.1 DEFINITIONS. For purposes of the Supplemental Executive
Retirement Plan and this Article 2, the following definitions shall apply:
"ACCOUNT" means the separate bookkeeping account established for
Participant on the books of Umpqua for the purpose of recording the amounts of
supplemental retirement benefits accrued for Participant
pursuant to the provisions of this Plan as if the Plan were accounted for in
accordance with Statement of Financial Accounting Standards No. 87.
"ANNUAL RETIREMENT BENEFIT" means an amount (subject to the provisions
of Section 2.9 of this Plan) to be paid annually until Participant's death. The
Annual Retirement Benefit equals three percent (3%) of Participant's Final
Average Compensation multiplied by the Participant's total years of service, net
of certain other retirement benefits provided by Umpqua (or its affiliates) and
Social Security ("Offsetting Benefits"). The Annual Retirement Benefit shall be
capped at sixty percent (60%) (i.e., twenty years of service). The Annual
Retirement Benefit shall be paid in monthly installments or on such other basis
permitted herein.
"CAUSE" has the same meaning as first ascribed to it
in the Employment Agreement.
"CHANGE IN CONTROL" has the same meaning as first
ascribed to it in the Employment Agreement.
"COMPENSATION" means Participant's base salary and
cash bonus paid or payable by Umpqua to Participant under the Employment
Agreement.
"COMPENSATION COMMITTEE" means the Compensation
Committee of the Board of Directors of Umpqua or its equivalent appointed by the
Board.
"DISABILITY" has the same meaning as first ascribed
to it in the Employment Agreement.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"FINAL AVERAGE COMPENSATION" means the highest three
(3) year average annual total Compensation out of the
final five (5) years of employment.
"GOOD REASON" has the same meaning as first ascribed
to it in the Employment Agreement.
"NORMAL COMMENCEMENT DATE" means the later of (i) the
first day of the month which is six months after the Termination Date or (ii)
the first day of the month following Retirement Age.
"OFFSETTING BENEFITS" means Social Security
retirement benefits plus any Retirement Plan or pension benefits funded by
Umpqua or its affiliates for the benefit of Participant, including interest or
earnings thereon, but specifically excluding amounts contributed by Participant
into a 401(k) or similar plan together with interest or earnings thereon and any
gain or other value derived under any stock options or other stock based
compensation plans.
"PLAN" means the Supplemental Executive Retirement
Plan set forth in this Agreement, as it may be amended from time to time.
"RETIREMENT AGE" means the Participant's sixty-second
birthday, June 3, 2011.
"RETIREMENT PLAN" means any defined benefit or
defined contribution plan qualified under Section 401(a) of
the Internal Revenue Code of 1986, sponsored by Umpqua.
"TERMINATION DATE" means the date on which
Participant ceases to be an employee of Umpqua for any reason, including death,
retirement, disability and voluntary or involuntary termination.
"UNFORESEEABLE EMERGENCY" means a severe financial
hardship resulting from an illness or accident of Participant, Participant's
spouse or a dependent (as defined in Section 152(a) of the Internal Revenue
Code), loss of Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of Participant.
"VESTING SCHEDULE" means that portion of the Account
that Participant is vested in as of the date of termination. The vesting years
and corresponding vesting percentages of the Account are as follows:
Prior to Voluntary Termination or Termination by Umpqua Without Cause
Year End Termination with Cause or by Participant for Good Reason
------------------- ------------------------------- --------------------------------------
6/30/2004 20% 30%
6/30/2005 25% 40%
6/30/2006 30% 50%
6/30/2007 35% 60%
6/30/2008 40% 80%
6/30/2009 60% 100%
6/30/2010 80% 100%
6/30/2011 90% 100%
Thereafter 100% 100%
SECTION 2.2 NORMAL RETIREMENT BENEFITS. In the event Participant's
employment is terminated on or after Participant has attained Retirement Age,
then on the Normal Commencement Date, Participant shall be entitled to receive
monthly payments of the Annual Retirement Benefit. Subject to Section 2.9 of
this Plan, monthly payments of the Annual Retirement Benefit shall continue
until Participant's death.
SECTION 2.3 BENEFITS UPON DISABILITY OF PARTICIPANT PRIOR TO RETIREMENT
AGE. If Participant's employment terminates by reason of a Disability,
Participant shall be entitled to receive monthly payments commencing on the
first day of the month six months after the Termination Date. The amount of the
monthly payments will be determined by annuitizing the amount of the Account as
of the Termination Date using the then life expectancy table published by the
Internal Revenue Service and other appropriate assumptions determined by
Umpqua's consulting actuaries reasonably acceptable to Participant. Subject to
Section 2.9, the monthly payments shall continue until Participant's death.
SECTION 2.4. BENEFITS UPON TERMINATION WITH CAUSE OR BY PARTICIPANT
WITHOUT GOOD REASON. If Participant is terminated for Cause, or Participant
terminates employment without Good Reason, prior to Participant reaching
Retirement Age, Participant shall be entitled to receive monthly payments
commencing on the Normal Commencement Date determined by annuitizing the vested
portion of the Account as set forth in the Vesting Schedule using the then life
expectancy table published by the IRS and other appropriate assumptions
determined by Umpqua's consulting actuaries reasonably acceptable to
Participant. Subject to Section 2.9 of this Plan, the monthly payments shall
continue until Participant's death.
SECTION 2.5. BENEFITS UPON TERMINATION WITHOUT CAUSE OR FOR GOOD
REASON. If Participant's employment is terminated without Cause or Participant
terminates employment for Good Reason prior to Participant reaching Retirement
Age, Participant shall be entitled to receive monthly payments commencing on the
Normal Commencement Date determined by annuitizing the vested portion of the
Account as set forth in the Vesting Schedule using the then life expectancy
table published by the Internal Revenue Service and other appropriate
assumptions determined by Umpqua's consulting actuaries reasonably acceptable to
Participant. Subject to Section 2.9 of this Plan, the monthly payments shall
continue until Participant's death.
SECTION 2.6. CHANGE IN CONTROL. If within two years of a Change of
Control Participant's employment is terminated without Cause or Participant
terminates his employment for any reason, Participant shall be entitled to
receive an amount (subject to the provisions of Section 2.9 of this Plan) to be
paid annually commencing on the Normal Commencement Date and continuing until
his death, equal to three percent (3%) of Participant's Final Average
Compensation multiplied by the Participant's total years of service at the date
of termination with a credit for additional years of service equal to one half
of the difference between 17 and the actual years of service on the date of
termination, net of Offsetting Benefits. This annual retirement benefit shall be
paid in monthly installments.
For illustrative purposes only, if Xxxxx' employment terminated on June
1, 2006 after a Change of Control with a Final Average Compensation of $600,000,
he would be entitle to a monthly payment of $21,750.00 for life commencing July
1, 2011 calculated as follows:
[(12< years of service > + 2.5 < 17 - 12 years of services / 2>) X (.03 < 3% per
year for each credited years of service >) X ($600,000 ) / (12 )] or [14.5 X .03 X $600,000
/ 12] equals $21,750 per month.
SECTION 2.7. ELECTION AS TO TIME OR NUMBER OF PAYMENTS. Participant
may, by completing an election form and filing it with the Administrator, elect
to change the form and timing of distributions, provided that:
(a) The election may not increase the accrued costs to Umpqua;
(b) No election to accelerate the timing of payments is permitted;
(c) Any election to change the time or form of distribution may not
take effect until at least 12 months after the date on which the amendment is
made;
(d) Other than a distribution upon death or Unforeseeable Emergency,
the first payment with respect to such election must be deferred for a period of
at least 5 years from the date such payment otherwise would have been made; and
(e) An amendment related to a distribution to be made at a specified
time may not be made less than 12 months prior to the date of the first
scheduled payment.
SECTION 2.8. DEATH BENEFIT. In the event Participant dies prior to
termination of employment with Umpqua, Participant's beneficiary, as designated
in writing to the Administrator, or if no beneficiary is so designated,
Participant's estate, shall receive a lump sum payment equal to the amount of
the Account as of the date of Participant's death. This death benefit shall be
paid within three (3) months of Participant's death.
SECTION 2.9. MINIMUM AND MAXIMUM TERM OF LIFE PAYMENTS. If Participant
is receiving payments under this Plan until his death, Umpqua and Participant
agree that such payments will cease in any event no later than 36 months after
Participant's predicted life expectancy determined by Umpqua's consulting
actuaries at the time of Participant's termination of employment, but,
notwithstanding Participant's earlier death, such payments will continue to a
date 36 months prior to such predicted life expectancy, with such payments made
to Participant's beneficiary as designated in writing to the Administrator, or
if no beneficiary is so designated, to Participant's estate. Participant's life
expectancy shall be determined based upon the then most recently published life
expectancy table by the Internal Revenue Services or other generally accepted
reference source.
SECTION 2.10. EARLY PAYMENT FOR UNFORESEEABLE EMERGENCY. Participant
shall not be entitled to withdraw any portion of the balance in the Account
except that, in event of hardship caused by an Unforeseeable Emergency, the
Administrator may, but is under no obligation to, distribute all or a portion of
the Account. The amount distributed may not exceed the amount necessary to
satisfy the financial hardship plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of Participant's assets
(to the extent the liquidation of such assets would not itself cause severe
financial hardship). In the event of any early payment, later benefits will be
appropriately adjusted to reflect the early payment as determined by Umpqua's
consulting actuaries.
SECTION 2.11. WITHHOLDING. Any payment or other distribution of
benefits under this Plan may be reduced by any amount required to be withheld by
Umpqua under any applicable law, rule, regulation, order or other requirement,
now or hereafter in effect, of any governmental authority.
SECTION 2.12. EFFECT ON RETIREMENT PLANS. Any amounts payable under
this Plan shall be disregarded for the purpose of determining any accrued
benefits of Participant under any Retirement Plan, except as required by law.
SECTION 2.13. ACCOUNT. The Account established under this Plan is an
unfunded plan of deferred compensation. Benefits and interest earned hereunder
are represented solely by bookkeeping entries on records maintained by the
Administrator. No funds are held in trust or otherwise segregated for the sole
purpose of paying Plan benefits. All Plan benefits are payable solely from the
general assets of Umpqua. The Umpqua may from time to time reserve assets in a
general account or grantor trust owned by Umpqua for the purpose of paying
liabilities that are accrued under this Plan. The Participant (and his
successors) shall have no legal or equitable rights, interest or claims in any
specific collateral, property or assets of Umpqua, but shall be general
unsecured creditors of Umpqua until benefits are paid hereunder.
SECTION 2.14. OFFSET. Any amounts due to Participant hereunder may be
applied by Umpqua to offset any amounts past due Umpqua from Participant,
provided that such offset may only occur at such time and to the extent that
benefit payments are due and payable.
SECTION 2.15. CLAIMS PROCEDURE.
2.15.1 INTERPRETATION. Any person desiring a benefit under,
interpretation or construction of, ruling under or information regarding this
Plan shall submit a written request therefor to the Administrator. The
Administrator shall respond in writing to any such request as soon as
practicable. Any interpretation or construction of, and any ruling under, this
Plan by the Administrator shall be final and binding on all parties.
2.15.2 DENIAL OF CLAIM. If a claim for benefits is denied in whole
or in part, the Administrator shall notify the claimant of such denial and of
his or her right to a conference with an individual designated in the notice for
the purpose of explaining the denial. If the claimant does not want such a
conference, or is dissatisfied with its outcome, he or she shall be furnished in
writing, in a manner calculated to be understood by the claimant, specific
reasons for such denial, specific references to the Plan provisions on which the
denial is based, a description of any additional material necessary for him or
her to perfect his or her claim, an explanation of why such material is
necessary, and an explanation of this Plan's appeals procedure as described in
Section 2.15.3.
2.15.3 APPEAL PROCEDURE. Any person, or his or her duly authorized
representative, whose claim for benefits under this Plan has been denied in
whole or in part, may appeal from such denial to the Administrator by submitting
to the Administrator a written request for review within seventy-five (75) days
after receiving notice of denial. The Administrator shall give the claimant an
opportunity to review pertinent documents relating to the denial in preparing
his or her request for review. The request must set forth all the grounds upon
which it is based, supporting facts and documents, and any other matters which
the claimant deems pertinent, and the relief sought. The Administrator may
require the claimant to submit such additional facts, documents or other
material as it deems necessary or advisable in making its review. The
Administrator shall act upon a request for review within 60 days after receipt
thereof unless special circumstances require further time, but in no event later
than 120 days after such receipt. If the Administrator confirms the denial in
whole or in part, the Administrator shall give written notice to the claimant
setting forth, in a manner calculated to be understood by the claimant, the
specific reasons for denial and specific reference to the Plan provisions on
which the decision was based. The determination of the Administrator upon such
review shall be final and conclusive, but subject to any right of appeal under
applicable law.
ARTICLE 3
MISCELLANEOUS.
SECTION 3.1 AMENDMENT OR TERMINATION. This Plan may be amended or
terminated only by the written agreement authorized by the Compensation
Committee and signed by the Administrator and Participant. Any amendment that
changes the form or timing of distributions must comply with the restrictions in
Section 2.7 above.
SECTION 3.2 PLAN ADMINISTRATOR. With respect to ERISA, the
Administrator shall be the plan administrator and named fiduciary as to this
Plan and the corporate secretary of Umpqua shall be the agent for purposes of
receiving legal process.
SECTION 3.3 NO RIGHT TO EMPLOYMENT. This Plan shall not confer upon
Participant the right to be retained in the employ of Umpqua, interfere with the
right of Umpqua to discharge or otherwise deal with Participant without regard
to the existence of this Plan or otherwise be interpreted or construed as
creating or modifying any employment or other contract between Umpqua and
Participant.
SECTION 3.4 CONCLUSIVENESS OF AUTHORIZED ACTION. All determinations
made under this Agreement by Umpqua's independent consulting actuaries shall be
binding upon Umpqua and Xxxxx in the absence of manifest error. Any other
actions taken with respect to this Plan by the Administrator shall be conclusive
upon Participant, his beneficiaries and any other persons entitled to benefits
under this Plan, subject to the claims procedure set forth in Section 2.15 and
the arbitration provisions set forth in Section 3.10.
SECTION 3.5 ALIENATION. No right, interest or benefit under this Plan
shall be subject to any anticipation, alienation, sale, transfer, assignment,
pledge, security interest, encumbrance, charge, execution, attachment,
garnishment or legal process, and any attempt to do so shall be void.
SECTION 3.6 INFORMATION. Participant and his beneficiaries under this
Plan shall provide such authorizations, elections, designations and other
information, as Umpqua shall deem necessary for the proper administration of
this Plan. All such authorizations, elections, designations and other
information shall be in form approved by Umpqua. The Umpqua shall not be
obligated to determine the accuracy or authenticity of any information provided
by Participant or any beneficiary under this Plan and any payment or other
distribution of benefits based thereon shall be binding on such person, or on
anyone claiming by, through or under such person, and shall completely discharge
any liability under this Plan to the extent of any payment made.
SECTION 3.7 HEADINGS. Headings of sections and paragraphs of this Plan
are inserted for convenience of reference only and shall not constitute a part
of this Plan.
SECTION 3.8 GOVERNING STATE. This Plan shall be interpreted, construed
and enforced in accordance with the laws of the State of Oregon, except insofar
as state law has been preempted by ERISA.
SECTION 3.9 ENTIRE AGREEMENT. This document constitutes the entire
agreement between the parties with respect to the Plan provided pursuant to
Section 5.5 of the Employment Agreement dated July 1, 2003
SECTION 3.10 ARBITRATION. Any dispute hereunder shall be resolved under
binding arbitration pursuant to the provision in Section 15 of the Employment
Agreement. Attorney fees will be awarded as provided by Section 17.9 of the
Employment Agreement.
SECTION 3.11 NOTICES. All notices, requests, demands, and other
communications provided for by this Agreement will be in writing and shall be
deemed sufficient upon receipt, when delivered personally or by a
nationally-recognized delivery service (such as Federal Express), or three (3)
business days after being
deposited in the U.S. mail as certified mail, return receipt requested, with
postage prepaid, if such notice is addressed to the party to be notified at such
party's address as set forth below or as subsequently modified by written
notice.
To Umpqua, Umpqua Holdings Corporation
Administrator, or Suite 1200
Compensation Committee Xxx XX Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Chairman of the Board of Directors
and copy to:
Xxxxxxx Xxxxxxx
Xxxxxx Pepper Tooze LLP
Suite 1800
000 XX 0xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
To Participant: Xxxxxxx X. Xxxxx
000 XX 00xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
and copy to:
Xxxxxxxx X. Xxxxxxxx
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
IN WITNESS WHEREOF, the parties hereto have signed this Restated
Agreement to be effective as of January 1, 2006.
Umpqua Holdings Corporation
By:
--------------------------------------------------
Xxxxxxx Xxxxxxx
Compensation Committee Chairman
-----------------------------------------------------
Xxxxxxx X. Xxxxx, Participant
