EXHIBIT 10.3
UMPQUA HOLDINGS CORPORATION
and
UMPQUA BANK
EXECUTIVE EMPLOYMENT
AND COMPENSATION AGREEMENT
FOR
XXXXXX X. XXXXXXXX
DATED AS OF MARCH 21, 2001
TABLE OF CONTENTS
1. Effective Date of Agreement................................................1
2. Term of Employment.........................................................1
3. Obligation Of The Parties To Negotiate In Good Faith.......................1
4. Employment Position, Duties, and Responsibilities..........................1
5. Compensation...............................................................2
6. Employee Benefits Plans....................................................2
7. Termination of Executive's Employment During The Term of Employment........3
8. Termination Of Employment In Connection With A Change In Control
Of Company.................................................................4
9. Definition Of "Cause"......................................................5
10. Definition Of "Change In Control" And "Triggering Event"...................6
11. Unexercised Stock Options..................................................7
12. Right To Seek Arbitration..................................................7
13. Obligation To Mitigate Damages.............................................7
14. Confidential Information...................................................8
15. Withholding................................................................8
16. Notices....................................................................8
17. General Provisions.........................................................8
18. Successors To The Company..................................................9
19. Amendment Or Modification..................................................9
20. Severability...............................................................9
21. Legal Expenses.............................................................9
22. Continuation Of Benefits..................................................10
EXECUTIVE EMPLOYMENT AND
COMPENSATION AGREEMENT
Date: Effective as of March 21, 2001
Parties: Umpqua Holdings Corporation, a financial holding company, and Umpqua
Bank, a bank chartered under the laws of the State of Oregon, its
subsidiaries and affiliates (the "Company")
and
Xxxxxx X. Xxxxxxxx (the "Executive")
Agreement: The Company and the Executive agree as follows:
1. Effective Date Of Agreement
---------------------------
This Agreement is effective as of March 21, 2001.
2. Term Of Employment
------------------
The term of this Agreement shall commence as of March 21, 2001 and
shall continue until the close of the Company's business on November 2,
2003 ("Term of Employment").
3. Obligation Of The Parties To Negotiate In Good Faith
----------------------------------------------------
Upon the expiration of the Term of Employment, the parties agree to
negotiate with one another in good faith regarding another Executive
Employment and Compensation Agreement. Upon the expiration of the Term
of Employment, the Executive shall be deemed to be an "employee at
will."
4. Employment Position, Duties, And Responsibilities
-------------------------------------------------
The Company agrees to continue the Executive in its employ, and the
Executive agrees to remain in the employ of the Company for the Term of
Employment in the position and with the duties and responsibilities of
a Executive Vice President and Chief Financial Officer of the Company
and shall report to the President and Chief Executive Officer of Umpqua
Holdings Corporation. At all times during the Term of Employment the
Executive shall hold a title and position of responsibility
commensurate with the Executive's title and position on March 21, 2001.
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5. Compensation
------------
During the Term of Employment, the Executive shall be paid by the
Company as follows:
a. Annual Base Salary
------------------
A minimum annual base salary of $171,200 ("Base Salary"),
payable at the rate of not less than $14,267 per month, for
the remainder of the calendar year 2001, and for the remainder
of the Term of Employment, together with such increases as may
be awarded by the Company from time to time in accordance with
the Company's regular practices of salary increases for
executives; plus
b. Annual Executive Performance Bonus
----------------------------------
An annual executive performance bonus under the Company's
Executive Bonus Compensation Plan or such equivalent successor
plan as may be adopted by the Company from time to time
("Performance Bonus").
c. Retirement Plans
----------------
The Executive shall be a full and vested participant in all of
the Company's retirement, and deferred compensation plans, if
any ("Retirement Plans") to the extent permitted by such
plans; plus
d. Fringe Benefits
---------------
The Executive shall be entitled to a monthly car allowance of
$500, payment or reimbursement of: club dues and initiation
fees for Roseburg Golf and Country Club and the Multnomah
Athletic Club; other club dues or dues for civic organizations
which in the opinion of the Board of Directors are beneficial
to the Company; and Executive's reasonable expenses incurred
by the Executive in the conduct of his duties.
6. Employee Benefit Plans
----------------------
In addition to the payments and other benefits provided for in this
Agreement, the Executive shall be entitled to participate in the
Company's Incentive Stock Option Plan, Non-Qualified Stock Option Plan,
and the Executive Profit Sharing and 401K Plan, if any, to the extent
permitted by such plans. If no such plans are in effect as of the date
of this Agreement, then the Executive shall become a participant as
soon as such plan or plans become operative.
Nothing in this Agreement shall preclude the Company from amending or
terminating any employee benefit plan or practice.
During the Term of Employment, the Executive's benefits set forth in
this Agreement shall not be less than those benefits available to the
Executive as of the date of this Agreement. The nature, level, and
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extent of such benefits to which Executive is entitled may be reduced
only with the Executive's written consent.
7. Termination Of Executive's Employment During the Term Of
Employment
--------------------------------------
a. Termination Of The Executive's Employment By The Company
For "Cause"
---------------------------------------
In the event the Executive's employment is terminated by the
Company during the Term of Employment for "cause" (as defined
in Section 9), the Executive shall be entitled to receive
payment only for those sums, benefits, and other fringe
benefits which have accrued to and are due and owing the
Executive as of the effective date of the termination of his
employment ("Effective Date"). Executive shall not be entitled
to any other sums for the remainder of the Term of Employment.
b. Termination Of The Executive's Employment By The Company
Within One Year After Hiring A New Chief Executive
Officer or President
------------------------------------------
In the event that the Company hires a new Chief Executive
Officer or President and the Executive's employment is
terminated by the Company within one (1) year following the
date of employment of the new Chief Executive Officer or
President, then the Executive shall be entitled to receive and
the Company shall be obligated to pay the Executive:
1. All compensation, benefits, and other fringe benefits
accrued to the Effective Date;
2. A minimum amount equal to nine (9) months' Base
Salary as defined in Section 5.(a);and
3. An amount equal to the projected Performance Bonus as
defined in Section 5.b. for the year in which the
Effective Date occurred, pro-rated based upon the
number of months during such year in which the
Executive was employed. For example, if Executive's
employment was terminated after six months of a bonus
year, and the projected bonus for the Executive for
that year was $20,000, then the Executive would be
entitled to receive the sum of $10,000 as the
projected pro-rated bonus for that year.
4. Health insurance benefits available to the Executive
on the Effective Date shall continue in full force
and effect for the maximum time allowed by law
following the Effective Date.
c. Payment of Sums Due Executive
-----------------------------
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All sums due the Executive pursuant to this Section 7 shall be
paid by the Company to the Executive in full, in cash, or the
equivalent of cash, within five days from the Effective Date.
8. Termination Of Employment In Connection With A Change In Control Of
Company
-------------------------
The provisions of this Section 8 shall govern all severance or
termination payments to the Executive in the event that the Company is
subject to a "change in control" (as defined in Section 10).
a. Termination of Employment Of The Executive By The Company Or
The Company's Successor In Interest, In Anticipation Of,
In Connection With, Or After A Change In Control
----------------------------
In the event that the Company, its successor in interest by
merger, its transferee, or the new owner of a controlling
interest in the Company's stock, terminates the Executive's
employment or causes the termination of the Executive's
employment during the Term of Employment in anticipation of,
in connection with, or after a change in control has occurred,
then the Company, its successor in interest by merger, its
transferee, or the new owner of its stock, as the case may be,
shall pay the Executive an amount equal to two times the
average of the total annual compensation, as defined in
Section 5.a. and b., including the Base Salary plus the
Performance Bonus, paid to the Executive during the last two
full calendar years of employment (including employment
pursuant to a prior agreement dated March 31, 1999 between the
Company and the Executive).
b. Termination Of Employment By Executive After A Change In
Control And Occurrence Of A "Triggering Event"
----------------------------
In the event that the Executive terminates his employment
during the Term of Employment after a change in control and a
"triggering event" (as defined in Section 10) has occurred,
then the Company, its successor in interest by merger, its
transferee, or the new owner of a controlling interest in the
Company's stock, as the case may be, shall pay the Executive
the following amount: an amount equal to two times the average
of the total annual compensation, as defined in Section 5.a.
and b., including the Base Salary plus the Performance Bonus,
paid to the Executive during the last two full calendar years
of employment (including employment pursuant to a prior
agreement dated March 31, 1999 between the Company and the
Executive).
c. Payments to Executive
---------------------
Executive shall be paid those amounts specified in this
Section 8 in full, in cash or the equivalent of cash, five
days after the Effective Date.
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d. Excess Parachute Payment
------------------------
If the lump sum payment under this Section 8 of this
Agreement, either alone or together with other payments to
which the Executive is entitled to receive from the Company,
would constitute an "excess parachute payment" as defined in
Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), such lump sum severance payment shall be reduced
to the largest amount that will result in no portion of the
lump sum payment under this Section 8 of this Agreement being
subject to the excise tax imposed by Section 4999 of the Code.
The determination of any reduction in the lump sum severance
payment under this Section 8 of this Agreement, pursuant to
the foregoing provisions, shall be made by mutual agreement of
the Company and the Executive.
9. Definition Of "Cause"
---------------------
"Cause" is defined as personal dishonesty, willful misconduct, breach
of fiduciary involving personal profit, failure to perform his stated
duties as Executive Vice President and Chief Financial Officer of the
Company, or failure of the Executive to devote his full time and
undivided attention during normal business hours to the business and
affairs of the Company, (except for reasonable vacations, illness or
disability and time devoted by the Executive to serving as a director
or member of any committee or organization engaging in charitable and
community activities).
10. Definition Of "Change In Control" and "Triggering Event"
--------------------------------------------------------
A "change in control" is defined as any transaction, act, series of
transactions or series of acts that either:
(a) would constitute a change in control for purposes of The Bank
Act (ORS Chapters 706 through 716), the Bank Holding Company
Act of 1956, as amended, The Bank Merger Act, as amended, The
Change In Bank Control Act, as amended, or The Securities
Exchange Act Of 1934, as amended, (collectively referred to
herein as the "Acts"), assuming the Company is subject to the
foregoing Acts regardless of whether the Company is actually
subject to the provisions of any such Acts;
(b) would result in any person, entity or group of persons as
those terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (but excluding an Employee
Stock Ownership Plan) becoming a beneficial owner, directly or
indirectly of the securities of the Company representing 20%
or more of the combined voting power of the Company's then
outstanding shares; or
(c) would result in individuals who were directors of the Company
as of the date of this Agreement ceasing to constitute at
least a majority of the Board of Directors of the Company at
any time prior to November 3, 2003.
A "triggering event" is defined as any one of the following events
which take place after a change in control has occurred:
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(a) failure to elect or reelect the Executive to the same or
higher office or removal of the Executive from the office of
Executive Vice President and Chief Financial Officer;
(b) a significant diminution in the nature or scope of the
authorities, powers, functions, or duties related to the
position of Executive Vice President and Chief Financial
Officer of the Company (including status, offices, and
reporting requirements), or a reduction in the compensation to
which Executive is entitled as set forth in Section 5 which is
not remedied within 30 days after receipt by the Company of
written notice from the Executive;
(c) the Company requiring the Executive to be based at any office
or location more than 50 miles from 000 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxx, or the Company requiring the Executive to
travel on Company business to a substantially greater extent
than required immediately prior to the date of this Agreement;
or
(d) breach by the Company of any provision of this Agreement not
covered within the foregoing clauses (a), (b), and (c) of this
section, which is not remedied within 30 days after receipt by
the Company of written notice from the Executive;
For the purposes of this Section 10 and this Agreement,
"Company" shall include the Company's successor in interest by
merger, its transferee of all or substantially all of the
Company's assets and/or liabilities, or the new owner of a
controlling interest of the Company's stock.
(e) The liquidation, dissolution, consolidation or merger of the
Company or one or more of the Company's subsidiaries or
affiliates, or the transfer of all or a significant portion of
the assets and/or liabilities of the Company, or one of its
subsidiaries or affiliates, unless a successor or successors
(by merger, consolidation or otherwise) to which all or a
significant portion of the Company's assets and liabilities or
the assets and liabilities of any of its subsidiaries have
been transferred, shall have assumed and discharged all duties
and obligations of the Company to the Executive under this
Agreement.
An election by the Executive to terminate his employment after the
occurrence of a change in control and the occurrence of a triggering
event as defined herein, shall entitle the Executive to payment of
those sums specified in Section 8.b.
11. Unexercised Stock Options
-------------------------
In the event that the Executive shall hold as of the Effective Date any
outstanding and unexercised (whether or not exercisable at the time)
stock options or options previously granted by the Company, the
disposition of such options shall be made in accordance with the
Company's Incentive Stock Option Plan (if any).
12. Right To Seek Arbitration
-------------------------
Either party shall have the right, in addition to all other rights and
remedies provided by law at their election, either to seek arbitration
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in Oregon, under the rules of the American Arbitration Association or
to institute a judicial proceeding, in either case within 90 days after
having received notice of termination of his employment.
13. Obligation To Mitigate Damages
------------------------------
In the event of the Executive's termination of employment, the
Executive shall not be required to mitigate damages by seeking other
employment.
14. Confidential Information
------------------------
Executive agrees not to disclose at any time any confidential
information obtained by him while in the employ of the Company. The
executive also agrees that upon leaving the Company, he will not take
with him any document of the Company's which is of a confidential or
proprietary nature.
15. Withholding
-----------
All payments required to be made by the Company to the Executive
pursuant to this Agreement shall be subject to applicable federal and
state withholding requirements.
16. Notices
-------
All notices, requests, demands, and other communications provided for
by this Agreement will be in writing and shall be sufficiently given if
and when mailed in the continental United States by registered or
certified mail, or personally delivered to the party entitled thereto
at the address stated below or to such changed addresses as the
addressee may have given by similar notice:
To the Company: Umpqua Holdings Corporation
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
To the Executive: Xxxxxx X. Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxx 00000
Any such notice delivered in person shall be deemed to have been
received on the date of delivery.
17. General Provisions
------------------
(a) There shall be no right of set-off or counter-claim against
any payments to the Executive, his surviving spouse,
beneficiaries, or estate. All sums to which the Executive is
entitled pursuant to this Agreement shall, upon his death, be
paid to his surviving spouse, heirs, or to his estate, if
there is no surviving spouse.
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(b) The Company and the Executive recognize that each party will
have no adequate remedy at law for breach of this Agreement;
and that in the event of any such breach, the Company and the
Executive agree and consent that the other shall be entitled
to apply for and obtain a Decree of Specific Performance.
(c) No right or interest to or in any payment shall be assignable
by the Executive, provided, however, that this provision shall
not preclude the Executive from designating one or more
beneficiaries to receive any amount or amounts that may be
payable to him after his death and shall not preclude the
legal representative of his estate from assigning any right
hereunder to the person or persons entitled thereto under his
Will or in the case of intestacy to the person or persons
entitled thereto under the laws of intestate succession of the
State of Oregon.
18. Successors To The Company
-------------------------
This Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, including without limitation
any corporation or corporations acquiring directly or indirectly all or
substantially all of the assets and/or liabilities, or a controlling
interest in the stock of the Company, whether by merger, consolidation,
sale or otherwise (and such successor shall thereafter be deemed "the
Company" for the purposes of this Agreement), but shall not otherwise
be assignable by the Company.
19. Amendment Or Modification
-------------------------
This Agreement may not be amended or modified without the written
consent of the parties to this Agreement. A waiver by either party to
this Agreement of any breach by the other party shall not be deemed to
be a waiver of any subsequent or continuing breach.
20. Severability
------------
In the event that any portion of this Agreement is declared
unenforceable, the remaining portions of this Agreement shall be
unaffected and shall remain in full force and effect.
21. Legal Expenses
--------------
If the Company fails to comply with any of its obligations under this
Agreement, or in the event that the Company or any other person takes
any action or declares this Agreement unenforceable or institutes any
litigation or other legal action designed to deny, diminish or to
recover from the Executive the benefits intended to be provided to the
Executive hereunder, and provided further that the Executive has
complied with all of his obligations under this Agreement, the Company
hereby authorizes the Executive to retain counsel of his choice at the
sole expense of the Company to represent the Executive in connection
with the initiation or defense of any litigation or other legal action
whether by or against the Company, or any director, officer,
shareholder, or other person affiliated with the Company in any
jurisdiction. The reasonable fees and expenses of counsel selected by
the Executive as provided herein shall be paid or reimbursed to the
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Executive by the Company on a regular periodic basis upon presentation
by Executive of a statement or statements prepared by such counsel in
accordance with such counsel's customary practices up to a maximum
aggregate amount of $60,000 for legal fees and expenses which shall be
paid regardless of whether the Executive prevails in any legal action.
22. Continuation Of Benefits
------------------------
During any period of time that the validity or enforceability of this
Agreement is being challenged by any party, the Company shall continue
to cover the Executive and his beneficiaries under the Company's
cafeteria plan, hospital plan, health care plan, dental plan, life or
other insurance or death benefit plan, or other present or future
similar group or employee benefit plan or program for which key
executives of the Company are eligible to the same extent as if the
Executive had continued to be an employee of the Company.
DATED as of March 21, 2001.
UMPQUA HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Title: President and CEO
-------------------------------
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
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