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EXHIBIT 10.1
UMPQUA HOLDINGS CORPORATION
EMPLOYMENT AGREEMENT
FOR
WILLIAM FIKE
DATED AS OF MAY 12, 2005
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EMPLOYMENT AGREEMENT
This
Employment Agreement (this "Agreement") is by and between
Umpqua
Holdings Corporation ("Umpqua") and William
Fike ("Officer"), effective as of
May 12, 2005.
1 PURPOSE AND DURATION OF AGREEMENT. The
purpose of this Agreement is to set
forth the terms of Officer's employment
with Umpqua and to provide Officer
benefits in certain circumstances where
Officer's employment is terminated or a
Change in Control (defined below) occurs.
This Agreement, including the
severance provisions governed by ERISA,
shall expire five (5) years from the
date first written above.
2 EMPLOYMENT. Umpqua, either directly or
through one of its wholly owned
subsidiaries, employs the Officer and
Officer accepts that employment on the
terms and conditions contained in this
Agreement. Officer's employment will
commence on May 12, 2005 (the "Commencement
Date").
3 NO TERM OF EMPLOYMENT. Notwithstanding
the term of this Agreement, Umpqua may
terminate Officer's employment at any time
for any lawful reason or for no
reason at all, subject to the provisions of
this Agreement.
4 DUTIES; POSITION.
4.1 Position. Officer shall be employed as President of Umpqua
Bank,
California Region, and will perform such
duties as may be designated by Umpqua's
Board of Directors (the "Board") or
Umpqua's President or Chief Executive
Officer to whom Officer will directly
report (the "Supervisor").
4.2 Obligations of Officer.
(a) Officer agrees that to the best of Officer's ability and
experience, Officer will at all times loyally and conscientiously
perform
all of the
duties and obligations required of Officer pursuant to the
express
and implicit terms of this Agreement and as directed by the
Board
or the
Supervisor.
(b) Officer shall devote Officer's entire working time,
attention
and
efforts to Umpqua's business and affairs, shall faithfully and
diligently
serve Umpqua's interests and shall not engage in any business
or
employment activity that is not on Umpqua's behalf (whether or
not
pursued
for gain or profit) except for (a) activities approved in
writing
in advance
by the Board and (b) passive investments that do not involve
Officer
providing any advice or services to the businesses in which the
investments are made.
5 COMPENSATION.
5.1 Base Compensation. For services performed under this
Agreement,
Officer shall be entitled to $25,000 per
month ($300,000 on annualized basis)
("Base Salary"), which Umpqua may increase
in its sole discretion, as well as
perquisites provided to Umpqua's officers.
Officer shall be entitled to
participate, under the terms of the
respective plans, group health insurance,
long-term disability insurance, 401(k)
plan, as well as such other compensation
or benefits as approved by the Board.
Officer is entitled to four weeks vacation
per year.
5.2 Incentive Compensation. Officer is eligible to participate
in
the 2005 Executive Incentive Compensation
Plan, under which Officer will have an
opportunity to earn incentive compensation
targeted at 50% of Officer's base
salary. For 2005, Officer shall be
guaranteed a minimum incentive payment of 50%
of his 2005 base salary. In subsequent
years, Officers will be eligible to
participate in the incentive compensation
plans, as approved by the Board.
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5.3 Other Perquisites. Officer's monthly dues for the Montreux
Country Club, will be reimbursed through
the monthly expense report pursuant to
Umpqua's reimbursement policy. Officer will
receive $600 per month as a car
allowance. Officer will also have access to
a vehicle owned by Umpqua, the
gasoline expenses and maintenance expenses
for which will be reimbursed by
Umpqua.
5.4 Stock Options. Subject to the Board's approval, as of the
Commencement Date, Officer will be granted
a non-qualified stock option to
purchase 50,000 shares of Umpqua's common
stock, pursuant to the 2003 Stock
Incentive Plan. The option will vest 20%
per year over five years. Subsequent
stock option grants will be at the Board's
discretion.
5.5 Deferred Compensation. Officer will be entitled to
participate
in a deferred compensation plan, under
which Officer may voluntarily defer
compensation.
5.6 Sign-On Bonus. As a sign-on bonus, the Officer will receive
a
bonus of $30,000 that will be paid within
30 days of the Commencement Date.
5.7 Relocation Expenses.
(a) Umpqua will reimburse Officer for two (2) house-hunting
trips, up to three (3) days, for the
purpose of finding a new residence in the
Roseville/Sacramento area. Eligible
expenses for reimbursement include
economical airfare or car mileage, car
rental (if needed), lodging and meals.
(b) Umpqua will reimburse Officer for moving expenses in an
amount not to exceed the cost estimate
provided by Umpqua's relocation
contractor. Umpqua will reimburse Officer
for the cost of driving two
automobiles, at the current approved
mileage rate.
(c) Umpqua will reimburse Officer for out of pocket living
expenses incurred between the Commencement
Date and June 30, 2005, as well as
for transportation expenses incurred while
traveling from Danville, California
to the Roseville between the Commencement
Date and June 30, 2005.
6 TERMINATION.Officer's employment may be
terminated before the expiration of
this Agreement as described in this
Section, in which event Officer's
compensation and benefits shall terminate
except as otherwise provided in this
Agreement.
6.1 For Cause. Upon Umpqua's termination of Officer's employment
for
Cause (as defined in Section 7.1 below)
("Termination For Cause").
6.2 Without Cause. Upon Umpqua's termination of Officer's
employment
without Cause, with or without notice, at
any time in Umpqua's sole discretion,
for any reason (other than for Cause,
death, or Disability) or for no reason
("Termination Without Cause"). A Change in
Control does not in itself constitute
Termination Without Cause.
6.3 For Good Reason. Upon Officer's termination of the
employment
for Good Reason (as defined in Section 7.2
below) ("Termination For Good
Reason").
6.4 Death or Disability. Upon Officer's death or Disability (as
defined in Section 7.3 below).
6.5 Resignation. Upon Officer's voluntary resignation in
writing,
which shall be given to Umpqua at least 60
days prior to the effective date of
such resignation ("Resignation"); provided,
Resignation shall not be permitted
if an event has occurred that would give
rise to Termination for Cause.
7 DEFINITIONS.
7.1 Cause. For the purposes of this Agreement, "Cause" for
Officer's
termination will exist upon the occurrence
of one or more of the following
events:
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(a) Dishonest or fraudulent conduct by Officer with respect to
the
performance of Officer's duties with Umpqua;
(b) Conduct by Officer that materially discredits Umpqua or any
of
its
subsidiaries or is materially detrimental to the reputation of
Umpqua
or any of
its subsidiaries, including but not limited to conviction or a
plea of
nolo contendere of Officer of a felony or crime involving moral
turpitude;
(c) Officer's willful misconduct or gross negligence in
performance
of
Officer's duties under this Agreement, including but not limited
to
Officer's
refusal to comply in any material respect with the legal
directives
of the Board or the Supervisor, if such misconduct or
negligence
has not been remedied or is not being remedied to the Board's
reasonable
satisfaction within thirty (30) days after written notice,
including
a detailed description of the misconduct or negligence, has
been
delivered
by the Board to Officer;
(d) An order or directive from a state or federal banking
regulatory
agency
requesting or requiring removal of Officer or a finding by any
such
agency
that Officer's performance threatens the safety or soundness of
Umpqua or
any of its subsidiaries; or
(e) A material breach of Officer's fiduciary duties to Umpqua
if
such
breach has not been remedied or is not being remedied to the
Board's
reasonable
satisfaction within thirty (30) days after written notice,
including
a detailed description of the breach, has been delivered by the
Board to
Officer.
7.2 Good Reason. For purposes of this Agreement, "Good Reason"
for
Officer's resignation of employment will
exist upon the occurrence of one or
more of the following events, without
Officer's consent, if Officer has informed
Umpqua in writing of the circumstances
described below in this Section that
could give rise to resignation for Good
Reason and Umpqua has not removed the
circumstances within thirty (30) days of
the written notice:
(a) A material reduction of Officer's Base Salary, unless the
reduction is in connection with, and
commensurate with, reductions in the
salaries of all or substantially all senior
officers of Umpqua;
(b) A requirement for Officer to relocate to a facility or
location more than 50 miles from the
location where Officer is currently
employed; or
(c) A material adverse change in the Officer's title or line
of reporting.
7.3 Disability. For purposes of this Agreement, "Disability"
shall
mean that (i) Officer has been unable to
perform Officer's duties under this
Agreement as a result of Officer's
incapacity due to physical or mental illness
for at least 90 consecutive calendar days
or 150 calendar days during any
consecutive 12 month period and (ii) a
physician selected by Umpqua and its
insurers and acceptable to Officer or
Officer's legal representative (with such
agreement on acceptability of the physician
not to be unreasonably withheld),
determines the incapacity to be (a) total
and permanent and (b) prohibiting of
Officer's ability to perform the essential
functions of Officer's position with
or without reasonable accommodation.
7.4 Change in Control. For purposes of this Agreement, a "Change
in
Control" shall be deemed to have occurred
when any of the following events take
place:
(a) Any person (including any individual or entity), or
persons acting in concert, become(s) the
beneficial owner of voting shares
representing fifty percent (50%) or more of
Umpqua;
(b) A majority of the Board is removed from office by a vote
of the Umpqua's shareholders over the
recommendation of the Board then serving;
or
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(c) Umpqua is a party to a plan of merger or plan of exchange
and upon consummation of such plan, the
shareholders of Umpqua immediately prior
to the transaction do not own or continue
to own (i) at least forty percent
(40%) of the shares of the surviving
company (if the then current CEO of Umpqua
continues as CEO of the surviving
organization), or (ii) at least a majority of
the shares of the surviving organization
(if the then current CEO of Umpqua does
not continue as CEO of the surviving
organization).
8. PAYMENT UPON TERMINATION. Upon
termination of Officer's employment for any of
the reasons set forth in Section 6 above,
Officer will receive payment for all
Base Salary and benefits accrued as of the
date of Officer's termination
("Earned Compensation"), which shall be
paid by the end of the business day
following termination or sooner if required
by applicable law.
9. SEVERANCE BENEFIT.In the event of
Termination Without Cause or Termination
for Good Reason, in addition to receiving
Earned Compensation, Officer will
receive a severance benefit equal to the
greater of (i) nine (9) months Base
Salary, based on Officer's Base Salary just
prior to termination or (ii) two
weeks for every year of employment with
Umpqua (the "Severance Benefit"). The
Severance Benefit shall be paid in equal
installments over the number of months
of continued Base Salary, starting on the
next regular payday following
termination. Receipt of the Severance
Benefit is conditioned on Officer having
executed the Separation Agreement in
substantially the form attached hereto as
Exhibit A and the revocation period having
expired without Officer having
revoked the Separation Agreement. Receipt
and continued receipt of the Severance
Benefit is further conditioned on Officer
not being in violation of any material
term of this Agreement or in violation of
any material term of the Separation
Agreement. Officer shall not be required to
mitigate the amount of any payments
under this Section (whether by seeking new
employment or otherwise) and no such
payment shall be reduced by earnings that
Officer may receive from any other
source.
10. CHANGE IN CONTROL BENEFIT
10.1 Post Change in Control Termination. After a Change in
Control
and for a period continuing for one year
following a Change in Control, in the
event of Termination Without Cause,
Termination For Good Reason, or Resignation
within 30 days after reassignment to a
position that is not substantially
equivalent, instead of receiving the
Severance Benefit set forth in Section 9
above, Officer shall receive 24 months Base
Salary, based on Officer's Base
Salary just prior to the termination of
employment, as well as 200% of the
incentive compensation Officer received for
the previous year (the
aforementioned Base Salary and incentive
are collectively referred to as the
"Change in Control Benefit"). The Change in
Control Benefit shall be paid in
equal installments over 24 months, starting
on the next regular payday following
termination. Receipt of the Change in
Control Benefit is conditioned on Officer
having executed the Separation Agreement in
substantially the form attached
hereto as Exhibit A and the revocation
period having expired without Officer
having revoked the Separation Agreement.
Receipt and continued receipt of the
Change in Control Benefit is further
conditioned on Officer not being in
violation of any material term of this
Agreement or in violation of any material
term of the Separation Agreement. Officer
shall not be required to mitigate the
amount of any payments under this Section
(whether by seeking new employment or
otherwise) and no such payment shall be
reduced by earnings that Officer may
receive from any other source.
10.2 Pre-Change in Control Termination. In the event Officer's
employment is terminated within six (6)
months prior to an announcement of a
definitive agreement that ultimately
results in a Change in Control, provided
Officer was entitled to receive the
Severance Benefit under Section 9, in
addition to the Severance Benefit, Officer
will receive an additional 15 months
Base Salary and 200% of the incentive
compensation Officer received for the
previous year (the "Supplemental Change in
Control Benefit"). The Supplemental
Change in Control Benefit will be paid in
equal installments over 15 months,
starting the later of the next pay period
following the last payment of the
Severance Benefit or the next pay period
following the Change in Control.
Receipt and continued receipt of the
Supplemental Change in Control Benefit is
further conditioned on Officer not being in
violation of any material term of
this Agreement or in violation of any
material term of the Separation Agreement.
11. CHANGE IN CONTROL RETENTION INCENTIVE.
If Officer remains employed for 12
months
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following a Change in Control, Officer will
receive 12 months Base Salary and
100% of the incentive compensation Officer
received for the previous year (the
aforementioned Base Salary and incentive
are collectively referred to as the
"Retention Incentive"). The Retention
Incentive shall be paid in equal
installments over 12 months, starting on
the next regular payday following the
first anniversary of the Change in Control.
Receipt of the Retention Incentive
is conditioned on Officer not being in
violation of any material term of this
Agreement. If Officer receives a benefit
under this Section 11, such benefit
shall cease when Officer begins to receive
any benefit under Section 10.
12. LIMITATION ON BENEFITS. 12.1 IRC 280G
Adjustment. If the benefit payments
under this Agreement, either alone or
together with other payments to which the
Officer is entitled to receive from Umpqua,
would constitute an "excess
parachute payment" as defined in Section
280G of the Internal Revenue Code of
1986, as amended (the "Code"), such benefit
payments shall be reduced to the
largest amount that will result in no
portion of benefit payments under this
Agreement being subject to the excise tax
imposed by Section 4999 of the Code.
The determination of any reduction in the
benefit payments pursuant to the
foregoing provisions, shall be made by
mutual agreement of Umpqua and Officer or
if no agreement is possible, by Umpqua's
accountants.
12.2 Limitation on Severance or Change in Control Benefit.
Notwithstanding any other provision in this
Agreement, Umpqua shall make no
payment of any benefit provided for herein
to the extent that such payment would
be prohibited by the provisions of Part 359
of the regulations of the Federal
Deposit Insurance Corporation (the "FDIC")
as the same may be amended from time
to time, and if such payment is so
prohibited, Umpqua shall use its best efforts
to secure the consent of the FDIC or other
applicable banking agencies to make
such payments in the highest amount
permissible, up to the amount provided for
in this Agreement.
13. EXECUTIVE SEVERANCE PLAN
13.1 In General. Those provisions of this Agreement (including
this
Section) related to the Severance Benefit
set forth in Section 9 and Change in
Control Benefit set forth in Section 10
constitute part of the terms of the
Umpqua Holdings Corporation Executive
Severance Plan (the "Executive Severance
Plan") with respect to the Officer, and
such terms and the general terms of the
Executive Severance Plan established by
Umpqua shall comprise the entirety of
the Executive Severance Plan as it applies
to the Officer. Umpqua intends for
the Plan to be considered a welfare benefit
plan within the meaning of Section
3(1) of the Employee Retirement Income
Security Act ("ERISA"), and a plan which
is unfunded and maintained by the Umpqua
solely for the purpose of providing
benefits for a select group of management
or highly compensated employees within
the meaning of ERISA Regulation Section
2520.104-24. A copy of the Executive
Severance Plan will be furnished to the
Officer upon request.
13.2 Administration of Executive Severance Plan. Umpqua's Chief
Executive Officer and Human Resources
Director are each plan administrators (the
"Plan Administrator") of the Executive
Severance Plan and the Plan Administrator
shall have the discretionary authority to
administer and construe the terms of
the Executive Severance Plan, including the
authority to decide if Officer is
entitled to the Severance Benefit or Change
in Control Benefit and the authority
to determine if there is Termination For
Cause or Termination For Good Reason.
13.3 Claims Procedures. The Officer may file a claim for a
payment
under the Executive Severance Plan by
filing a written request for such a
payment with the Plan Administrator. If the
Plan Administrator prescribes a form
for such a claim, the claim must be filed
on such form. The claim should be sent
to the attention of the Plan Administrator
of the Executive Severance Plan at
the address set forth for Umpqua in Section
20.
If the Plan Administrator denies the claim, in whole or in part,
the
Plan Administrator shall notify the Officer
within 90 days of the Plan
Administrator's receipt of the claim,
unless the Plan Administrator determines
that special circumstances require an
extension of time for processing the
claim. If the Plan Administrator determines
that an extension of time is
required, written notice of the extension
shall be furnished to Officer prior to
the termination of the initial 90-day
period. Such extension notice shall
indicate the special circumstances and the
date by which the Plan Administrator
expects to issue a determination with
respect to the claim. The period of the
extension will not exceed 90 days beyond
the termination of the original 90-day
period. If the Plan Administrator does not
provide written notice, Officer may
deem the claim denied and seek review
according to the appeals
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procedures set forth below.
The notice of denial of Officer's claim shall state:
a. the specific reasons for the denial;
b. specific references to pertinent provisions of the Executive
Severance Plan on which the denial was based;
c. a description of any additional material or information
needed
for Officer to perfect his or her claim and an explanation of
why
the material or information is needed; and
d. a statement (1) that Officer may request a review upon
written
application to the Plan Administrator, review or receive (free
of
charge) pertinent Plan documents and records, and submit issues
and
comments in writing, (2) that any appeal that Officer wishes to
make
of the adverse determination must be in writing to the Plan
Administrator within sixty (60) days after the Officer receives
notice of
denial of benefits, and (3) that Officer may bring a civil
action under ERISA Section 50
