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EXHIBIT 10.1
NONQUALIFIED STOCK OPTION AGREEMENT
This
Nonqualified Stock Option Agreement is made and entered into
pursuant
to the terms of the 2003 Stock Incentive Plan (the "Plan") adopted
by the Board
of Directors and Shareholders of Umpqua Holdings Corporation (the
"Company").
Unless otherwise defined herein, capitalized terms defined in this
Nonqualified
Stock Option Agreement shall have the meanings as defined in the
Plan.
THE "OPTIONEE"
RAYMOND P. DAVIS
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NUMBER OF SHARES OF THE
25,000
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COMPANY'S COMMON STOCK
"EXERCISE PRICE" PER SHARE
$ 28.425
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"DATE OF GRANT"
1/18/2006
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"EXPIRATION DATE"
1/17/2016
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1. TERMS
OF THE OPTION.
1.1 Grant
of Option. The Company hereby grants to the Optionee the right,
privilege, and option (the "Option") to purchase up to the number
of shares of
Common Stock indicated above (the "Option Shares") at the Exercise
Price
indicated above, subject to adjustment in accordance with the terms
and
conditions of the Plan. The Option may only be exercised as to a
whole number of
shares of Common Stock.
1.2 Status
of the Option as a Nonqualified Stock Option. The Company
intends that the Option will not qualify as an incentive stock
option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
1.3
Limited Transferability of Option. The Option may be transferred
by
gift to Permitted Transferees. "Permitted Transferees" includes the
Optionee's
spouse, children or a trust for the exclusive benefit of any
combination of the
Optionee, the Optionee's spouse and the Optionee's children. A
transfer to a
Permitted Transferee will not be effective unless and until the
Optionee and the
transferee of the Option execute and deliver to the Company a
Transfer/Assumption of Nonqualified Stock Option Agreement in the
form requested
by the Company. Notwithstanding any transfer of the Option, the
Optionee shall
remain liable to the Company for any income tax withholding
amounts, which the
Bank is required to withhold at the time that the transferred
Option is
exercised. Other than as set forth above, the Option and the rights
of the
Optionee under this Nonqualified Stock Option Agreement may only be
transferred
by will or by the laws of descent and distribution upon the death
of Optionee.
1.4
Reservation of Shares. The Company agrees that at all times there
will
be reserved for issuance upon exercise of the Option such number of
shares of
its Common Stock as is required for such issuance.
2. TIME OF
EXERCISE OF OPTION.
2.1 When
the Option Becomes Exercisable. Except as otherwise set forth
in
Section 5.2 below, the Option may only be exercised in accordance
with the
vesting schedule attached hereto (the "Vesting Schedule") and only
to the extent
not previously exercised. In the event of certain changes in the
capital
structure of the Company, the number of Option Shares vesting at
any time as
indicated in the Vesting Schedule may be adjusted as determined
appropriate by
the Committee.
2.2 Effect
of Unpaid Leaves of Absence. Unless the Committee at the time
of such leave determines otherwise, if at any time during the term
of the
Option, the Optionee is on unpaid leave from the Company or any
Subsidiary, the
Option may not be exercised during such unpaid leave and the dates
contained in
the Vesting Schedule shall be extended by the length of such unpaid
leave.
2.3
Expiration and Termination of Option. The Option will expire upon
the
close of business on the Expiration Date and may terminate earlier
upon certain
events as set forth in Section 4 of this Nonqualified Stock Option
Agreement. To
the extent that the Option has not been exercised prior to the
Expiration Date
or any earlier termination, all further rights to purchase shares
pursuant to
the Option will cease and terminate at such time.
3. OPTION
EXERCISE PROCEDURES.
3.1 Who
May Exercise the Option. Only the Optionee (or, in the case of
exercise after death of the Optionee, by the
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executor, administrator, heir, or legatee of the Optionee, as the
case may be)
or the Permitted Transferee may exercise the Option.
3.2 Notice
of Exercise. A "Notice of Exercise" must be signed and
delivered to the Company's corporate Secretary or such other person
as the
Company may designate at the Company's principal business office of
the Company.
A copy of the Company's current form of Notice of Exercise is
attached hereto.
The Company, however, reserves the right to revise its form of
Notice of
Exercise from time-to-time as it determines to be appropriate. If,
at the time
of the exercise of the Option, the Company does not have an
effective
registration statement on file with the Securities and Exchange
Commission that
covers the issuance of shares upon the exercise of the Option, the
Notice of
Exercise will also contain certain representations from the
Optionee as required
under applicable state and federal securities laws. A copy of the
then-current
form of Notice of Exercise may be obtained at any time from the
Company. A
notice will only be effective if submitted on the form in effect at
the time of
such exercise.
3.3
Payment of Exercise Price. The Notice of Exercise must indicate
the
manner of payment of the Exercise Price for the number of shares so
purchased.
Payment shall be made by cash, by the surrender to the Company for
cancellation
of shares of Common Stock or other securities of the Company, based
on the Fair
Market Value of the Common Stock, (provided that the surrendered
shares of
Common Stock or other securities of the Company shall have been
held by the
Optionee for not less than six months), such other valid
consideration as the
Committee may, in its sole discretion, permit or any combination of
the
foregoing.
3.4
Payment of Tax Withholding. The Optionee shall pay or make
adequate
provision for payment of Tax Withholding upon exercise of the
Option. The notice
of exercise shall indicate the method of payment of Tax
Withholding, which may
be accomplished by payment in cash, the Company withholding other
amounts
payable by the Company to the Optionee, by the application of
shares to be
received upon exercise of the Option based on Fair Market Value of
the Common
Stock, the surrender of shares of Common Stock or other securities
of the
Company based on the Fair Market Value of the Common Stock
(provided that the
surrendered shares of Common Stock or other securities of the
Company shall have
been held by the Optionee for not less than six months) or any
combination of
the foregoing.
3.5
Delivery of Shares Following Exercise. The Company will make
delivery
of a certificate representing the Option Shares purchased within a
reasonable
time after it receives the Notice of Exercise, payment in full of
the Exercise
Price of the Option Shares being purchased and the payment or
adequate provision
for payment of Tax Withholding. However, if any law or regulation
requires the
Company to take any action with respect to the issuance of the
Option Shares,
including, without limitation, actions that may be required for
compliance with
federal and state securities laws or the listing requirements of
any stock
exchange upon which the Company's Common Stock is then listed, then
the date of
delivery of such certificate may be extended for the period
necessary to take
such action. The Optionee shall only become the holder of such
shares when the
issuance of the shares is reflected on the Company's stock transfer
record,
except that if the Option is exercised conditioned on the
occurrence of a Change
of Control Transaction, as provided for in Section 5.3 below, the
Optionee shall
be deemed a holder of such shares as of the effective date of the
Change of
Control Transaction.
4.
TERMINATION OF THE OPTION
4.1 Effect
of the Death of the Optionee. If the Optionee dies while an
employee of the Company or any Subsidiary, the Option will
terminate one year
after the date of such death or, if sooner, upon the Expiration
Date. In such
event, the Option may be exercised only to the extent the Optionee
was entitled
to exercise the Option on the date of the Optionee's death and only
by a
Permitted Transferee or the person or persons to whom the
Optionee's rights
under the Option may pass by the Optionee's will or by the laws of
descent and
distribution of the state or country of the Optionee's domicile at
the time of
death.
4.2 Effect
of the Disability of the Optionee. If the Optionee's employment
by the Company or any Subsidiary terminates as a result of the
Optionee becoming
Disabled (as defined in the Plan) while an employee of the Company
or any
Subsidiary, the Option will terminate one year after the date of
such
termination of employment or, if sooner, upon the Expiration Date.
In such
event, the Option may be exercised only to the extent the Optionee
or Permitted
Transferee was entitled to exercise the Option on the date of such
termination.
4.3 Effect
of Termination of the Employment of the Optionee for Cause. If
the Optionee's employment with the Company or any Subsidiary is
terminated for
"cause," the Option will terminate on the effective date of the
termination of
the Optionee's employment and shall no longer be exercisable as to
any of the
remaining Option Shares. "Cause" shall have the definition given in
the attached
vesting schedule.
4.4 Effect
of any other Termination of t
